Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 07, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | HOME LOAN SERVICING SOLUTIONS, LTD. | |
Trading Symbol | HLSS | |
Entity Central Index Key | 1,513,161 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 71,016,771 |
Condensed Statement of Net Asse
Condensed Statement of Net Assets (Liquidation Basis) - USD ($) $ in Thousands | Jun. 30, 2015 |
Liquidation Basis of Accounting | |
Assets | |
Cash and cash equivalents | $ 46,070 |
Related party receivables | 2,170 |
Estimated income expected to be earned during liquidation | 17 |
Total assets | 48,257 |
Liabilities | |
Reserve for estimated costs during the period of liquidation | 460 |
Other liabilities | 771 |
Total liabilities | $ 1,231 |
Commitments and Contingencies | |
Net Assets | $ 47,026 |
Condensed Statement of Changes
Condensed Statement of Changes in Net Assets (Liquidation Basis) - USD ($) $ in Thousands | 3 Months Ended |
Jun. 30, 2015 | |
Liquidation Basis of Accounting | |
Interest income | |
Interest income – other | $ 107 |
Operating expenses | |
Compensation and benefits | 366 |
General and administrative expenses | 3,297 |
Total operating expenses | 3,663 |
Other expenses | |
Loss on extinguishment of senior secured term loan facility | 8,083 |
Loss on disposal of discontinued operations | 29,614 |
Total other expenses | 37,697 |
Liquidating distributions to shareholders | 1,179,802 |
Change in Net assets during the period | (1,221,055) |
Net assets at June 30, 2015 | $ 47,026 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Going-Concern Basis) - USD ($) $ in Thousands | Dec. 31, 2014 |
Assets | |
Cash and cash equivalents | $ 210,009 |
Match funded advances | 6,121,595 |
Notes receivable – Rights to MSRs | 614,465 |
Loans held for investment | 815,663 |
Related party receivables | 94,401 |
Deferred tax assets | 491 |
Other assets | 281,475 |
Total assets | 8,138,099 |
Liabilities | |
Match funded liabilities | 5,624,088 |
Other borrowings | 1,182,328 |
Dividends payable | 12,783 |
Income taxes payable | 173 |
Deferred tax liabilities | 491 |
Related party payables | 14,503 |
Other liabilities | 12,454 |
Total liabilities | $ 6,846,820 |
Commitments and Contingencies | |
Equity | |
Equity – Ordinary shares, $0.01 par value; 200,000,000 shares authorized; 71,016,771 shares issued and outstanding at December 31, 2014 | $ 710 |
Additional paid-in capital | 1,210,300 |
Retained earnings | 79,133 |
Accumulated other comprehensive income, net of tax | 1,136 |
Total equity | 1,291,279 |
Total liabilities and equity | $ 8,138,099 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Going-Concern Basis) (Parenthetical) - $ / shares | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | |
Common stock, Par value (usd per share) | $ 0.01 |
Common stock, shares authorized | 200,000,000 |
Common stock, shares issued | 71,016,771 |
Common stock, shares outstanding | 71,016,771 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Going-Concern Basis) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Interest income | ||||
Interest income – other | $ 1 | $ 25 | $ 13 | $ 30 |
Total interest income | 1 | 25 | 13 | 30 |
Operating expenses | ||||
Compensation and benefits | 15 | 230 | 131 | 261 |
General and administrative expenses | 183 | 8,952 | 601 | 1,081 |
Total operating expenses | 198 | 9,182 | 732 | 1,342 |
Loss from continuing operations | (197) | (9,157) | (719) | (1,312) |
Discontinued operations (Note 1A) | ||||
Earnings from discontinued operations | 1,401 | 25,626 | 51,379 | 116,332 |
Income tax expense | 6 | 11 | 0 | 0 |
Net income from discontinued operations | 1,395 | 25,615 | 51,379 | 116,332 |
Net income | $ 1,198 | $ 16,458 | $ 50,660 | $ 115,020 |
Basic (Loss) Earnings per share | ||||
From continuing operations (usd per share) | $ (0.01) | $ (0.13) | $ (0.01) | $ (0.02) |
From discontinued operations (usd per share) | 0.03 | 0.36 | 0.72 | 1.64 |
Basic earnings per share (usd per share) | 0.02 | 0.23 | 0.71 | 1.62 |
Diluted (Loss) Earnings per share | ||||
From continuing operations (usd per share) | (0.01) | (0.13) | (0.01) | (0.02) |
From discontinued operations (usd per share) | 0.03 | 0.36 | 0.72 | 1.64 |
Diluted earnings per share (usd per share) | $ 0.02 | $ 0.23 | $ 0.71 | $ 1.62 |
Weighted average shares outstanding | ||||
Basic (shares) | 71,016,771 | 71,016,771 | 71,016,771 | 71,016,771 |
Diluted (shares) | 71,029,271 | 71,084,310 | 71,016,771 | 71,016,771 |
Dividends declared per share (usd per share) | $ 0 | $ 0.54 | $ 0.48 | $ 0.93 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Comprehensive Income (Going-Concern Basis) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,198 | $ 16,458 | $ 50,660 | $ 115,020 |
Other comprehensive income (loss), before tax: | ||||
Change in the value of designated cash flow hedges | 0 | (2,389) | (1,778) | (2,005) |
Reclassification of loss on settlement of interest rate swaps recognized in net income | 440 | 440 | 0 | 0 |
Total other comprehensive income (loss), before tax | 440 | (1,949) | (1,778) | (2,005) |
Income tax related to items of other comprehensive loss: | ||||
Tax benefit on change in the value of designated cash flow hedges | 0 | 813 | 611 | 689 |
Total other comprehensive income (loss), net of tax | 440 | (1,136) | (1,167) | (1,316) |
Total comprehensive income | $ 1,638 | $ 15,322 | $ 49,493 | $ 113,704 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Changes in Equity (Going-Concern Basis) - USD ($) $ in Thousands | Total | Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net of Tax |
Balance (in shares) at Dec. 31, 2013 | 71,016,771 | ||||
Balance at Dec. 31, 2013 | $ 1,216,447 | $ 710 | $ 1,210,057 | $ 3,513 | $ 2,167 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 115,020 | 115,020 | |||
Other comprehensive loss, net of tax | (1,316) | (1,316) | |||
Share-based compensation | 64 | 64 | 0 | ||
Declaration of cash dividends | (66,045) | 0 | (66,045) | ||
Balance (in shares) at Jun. 30, 2014 | 71,016,771 | ||||
Balance at Jun. 30, 2014 | 1,264,170 | $ 710 | 1,210,121 | 52,488 | 851 |
Balance (in shares) at Dec. 31, 2014 | 71,016,771 | ||||
Balance at Dec. 31, 2014 | 1,291,279 | $ 710 | 1,210,300 | 79,133 | 1,136 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 16,458 | 16,458 | |||
Other comprehensive loss, net of tax | (1,136) | (1,136) | |||
Share-based compensation | (171) | (145) | (26) | ||
Declaration of cash dividends | (38,349) | 0 | (38,349) | ||
Balance (in shares) at Apr. 05, 2015 | 71,016,771 | ||||
Balance at Apr. 05, 2015 | $ 1,268,081 | $ 710 | $ 1,210,155 | $ 57,216 | $ 0 |
Condensed Consolidated Stateme9
Condensed Consolidated Statements of Changes in Equity (Going-Concern Basis) (Parenthetical) - $ / shares | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Statement of Stockholders' Equity [Abstract] | |||||
Declaration of cash dividends, per share | $ 0 | $ 0.54 | $ 0.48 | $ 0.54 | $ 0.93 |
Condensed Consolidated Statem10
Condensed Consolidated Statements of Cash Flows (Going-Concern Basis) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 05, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities | ||
Net income | $ 16,458 | $ 115,020 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of Debt issuance costs | 4,615 | 9,560 |
Accretion of original issue discount on Other borrowings | 185 | 372 |
Net amortization of purchase premiums and discounts on Loans held for sale | 191 | 0 |
Amortization of purchase premiums on Loans held for investment | 0 | 1,792 |
Accretion of Loans held for sale | (1,595) | (151) |
Decrease (increase) in the fair value of Notes receivable – Rights to MSRs | 3,679 | 0 |
Unrealized loss on Loans held for sale | 7,654 | 0 |
Net forfeitures of share-based compensation | (145) | 64 |
Changes in assets and liabilities: | ||
Decrease in Match funded advances | 533,875 | 254,023 |
Decrease (increase) in debt service accounts | (99,398) | (42,254) |
(Increase) decrease in related party receivables | (68,264) | 52,995 |
Decrease in related party payables | 927 | (7,741) |
Decrease (increase) in other assets | 15,763 | (10,415) |
Increase (decrease) in other liabilities | 8,047 | (1,030) |
Net cash provided by operating activities | 421,992 | 372,235 |
Cash flows from investing activities | ||
Reduction in Notes receivable – Rights to MSRs | 17,498 | 4,190 |
Purchase of Loans held for investment | 0 | (832,866) |
Repayments of GNMA EBO loans and RPLs | 20,716 | 29,133 |
Proceeds from the sale of RPL portfolios | 337,553 | 0 |
Cash used in related party servicing advance financing transactions | 0 | (81,688) |
Cash proceeds from related party servicing advance financing transactions | 5,549 | 1,216 |
Net cash provided by (used in) investing activities | 381,316 | (880,015) |
Cash flows from financing activities | ||
(Repayments of) proceeds from Match funded liabilities, net | (430,970) | (121,693) |
Proceeds from Other borrowings | 2,481 | 707,720 |
Payment of Other borrowings | (334,990) | (1,750) |
Payment of Debt issuance costs | (5,921) | (9,639) |
Payment of dividends to shareholders | (38,349) | (65,336) |
Net cash (used in) provided by financing activities | (807,749) | 509,302 |
Net increase in cash | (4,441) | 1,522 |
Cash and cash equivalents, beginning of period | 210,009 | 87,896 |
Cash and cash equivalents, end of period | 205,568 | 89,418 |
Supplemental non-cash investing activities | ||
Transfers of Loans held for sale to claims receivable from FHA | 16,747 | 0 |
Increase in receivables in conjunction with the sale of RPL portfolios | 16,824 | 0 |
Transfer of Loans held for investment to Loans held for sale | 421,257 | 0 |
Supplemental non-cash financing activities | ||
Dividends declared but not paid | 12,783 | 11,363 |
Debt issuance costs accrued but not paid | $ 2 | $ 330 |
Organization; Asset Sale; Disco
Organization; Asset Sale; Discontinued Operations; Related Parties; Other Recent Developments | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization; Asset Sale; Discontinued Operations; Related Parties; Other Recent Developments | ORGANIZATION; ASSET SALE; DISCONTINUED OPERATIONS; RELATED PARTIES; OTHER RECENT DEVELOPMENTS Organization Home Loan Servicing Solutions, Ltd. and its former wholly owned subsidiaries (collectively referred to throughout as “HLSS”, “us”, “our”, “we”, or the “Company”) were engaged in the business of acquiring mortgage servicing assets whereby we acquired the rights to receive the servicing fees less compensation to the current servicer for their servicing activities (“Rights to MSRs”), servicing advances associated with our Rights to MSRs, whole loans held for investment, and other residential mortgage-related assets (“Residential Mortgage Assets”). We engaged Ocwen Financial Corporation (together with its subsidiaries, collectively “Ocwen”) and another residential mortgage loan servicer to service the mortgage loans underlying our Residential Mortgage Assets and therefore did not develop our own mortgage servicing platform. Effective April 6, 2015, Home Loan Servicing Solutions, Ltd. became externally managed pursuant to a Services Agreement with HLSS Advances Acquisition Corp (“HLSS Advances”). Asset Sale On April 6, 2015 , we sold substantially all of our assets (the “Asset Sale”) pursuant to a Share and Asset Purchase Agreement entered into on such date (the “NRZ Purchase Agreement”) among us, New Residential Investment Corp. (“NRZ”), Hexagon Merger Sub, Ltd. (“Merger Sub”), MSR-EBO Acquisitions LLC (“HLSS MSR-EBO”) and HLSS Advances. In connection with the Asset Sale, among other things, (i) HLSS MSR-EBO acquired substantially all of the assets of the Company (including all of the issued share capital of HLSS Luxco 1B S.à r.l. (“Luxco 1B”)) and (ii) HLSS Advances acquired all of the issued share capital of HLSS Luxco 1A S.à r.l. (“Luxco 1A”) and assumed substantially all of the liabilities of the Company, including certain post-closing liabilities of the Company. In exchange, the Company received an amount in cash equal to approximately $1.0 billion plus 28,286,980 newly issued shares of NRZ common stock with a par value $0.01 per share. All of such shares were sold in a registered public offering, and we realized net proceeds of approximately $422,749 . In conjunction with the Asset Sale, our senior secured term loan facility was retired. Concurrently with the execution of the NRZ Purchase Agreement, our Board of Directors adopted and approved a plan of complete liquidation and dissolution (the “Liquidation Plan”), pursuant to which we agreed to (1) cease our business activities other than such activities that are necessary to carry out the provisions of the Liquidation Plan, (2) pay or make adequate provision for operating expenses expected to be incurred through the completion of the Liquidation Plan and (3) distribute to our shareholders in one or more distributions, (a) the cash received by the Company in the Asset Sale and the net proceeds from the sale of NRZ common stock received by the Company in the Asset Sale, less (b) amounts used to pay the liabilities of the Company and less a reserve in the amount of $50 million that will be held by the Company at the discretion of the Board to ensure that the Company will be able to meet known and unknown liabilities up to the date of the consummation of the transactions contemplated by the Merger (as defined below) or, if the transactions contemplated by the Merger are not consummated, the date of the final liquidating distribution after settlement of the liabilities and to ensure that the Company has available resources in the event that it is necessary to enforce against third parties any contractual or other rights of the Company or its officers or directors. If the Merger is consummated, our shares will be converted automatically into the right to receive $0.704059 per share in cash without interest (the “Merger Consideration”). If the Merger is not consummated, it is anticipated that a further cash distribution will be made to shareholders. Immediately following the closing of the Asset Sale contemplated by the NRZ Purchase Agreement, we entered into, among other things: (i) an Agreement and Plan of Merger (the “Merger Agreement”) with NRZ and Merger Sub, pursuant to which, among other things, the Company will be merged with and into Merger Sub (the “Merger”), with the Company ceasing its corporate existence and Merger Sub surviving the Merger and (ii) a Services Agreement, pursuant to which HLSS Advances provides us with certain services, including, among other things, handling (including defending, prosecuting or resolving) all claims, disputes or controversies (including any litigation, arbitration, governmental investigations or inquiries or any other proceedings or negotiations) in which the Company is a party or may otherwise be involved. On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each ordinary share, par value $0.01 per share, of the Company (the “Company Shares”) issued and outstanding immediately prior to the Effective Time (other than Company Shares owned by any direct or indirect wholly-owned subsidiary of NRZ (other than Merger Sub) or of Merger Sub and Company Shares as to which dissenters’ rights have been properly exercised) will be converted automatically into the right to receive the Merger Consideration. The parties’ obligations to consummate the Merger are subject to certain closing conditions, including approval of the Merger by the requisite vote of the shareholders, the absence of any legal restraints that would prohibit the consummation of the Merger and other conditions customary for a transaction of this type. Each of us, NRZ and Merger Sub has made certain customary representations, warranties and covenants in the Merger Agreement, including, among other things, covenants related to the conduct of our business during the interim period between the execution of the Merger Agreement and the consummation of the Merger. The Merger Agreement provides for certain termination rights for both us and NRZ, including, if approval of the Merger by the requisite vote of the shareholders is not obtained or if the Merger is not consummated by the nine month anniversary of the date of the Merger Agreement. Subsequent to the Asset Sale, the Company has no meaningful sources of revenue and is in the process of winding down operations. Discontinued Operations The following table presents the components of the Loss on disposal of discontinued operations included in the Condensed Statement of Changes of Net Assets for the period from April 6, 2015 to June 30, 2015: Assets Cash and cash equivalents $ 48,755 Match funded advances 5,587,720 Notes receivable – Rights to MSRs 593,288 Loans held for sale 417,574 Related party receivables 162,831 Deferred tax assets 996 Other assets 386,393 7,197,557 Liabilities Match funded liabilities 5,193,119 Other borrowings 510,045 Dividends payable 12,783 Income taxes payable 146 Deferred tax liabilities 184 Related party payables 15,595 Other liabilities 18,948 5,750,820 Net assets in disposal group 1,446,737 Consideration received Cash 994,374 NRZ common stock Number of shares 28,286,980 Price per share 15.28 Value of NRZ common stock consideration 432,225 Less: Brokerage and other costs on sale of NRZ common stock (9,476 ) Total consideration received 1,417,123 Loss on disposal of discontinued operations $ 29,614 The Asset Sale resulted in the disposal of substantially all of the Company’s operations, and as such, certain amounts in the prior period have been reclassified to Net income from discontinued operations for all periods presented to conform to the current year presentation with no impact to previously reported net income or shareholders’ equity. Net income from discontinued operations reported in the Interim Condensed Consolidated Statements of Operations consisted of the following components for the periods indicated: For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Revenue Interest income – notes receivable – Rights to MSRs $ 5,362 $ 86,574 $ 76,568 $ 189,112 Interest income – other 542 7,777 9,994 10,721 Total interest income 5,904 94,351 86,562 199,833 Related party revenue 4 773 54 1,401 Other revenue 3 — 1,443 — Total revenue 5,911 95,124 88,059 201,234 Operating expenses Compensation and benefits 137 1,694 2,000 3,163 Related party expenses — 496 76 868 General and administrative expenses 915 1,554 8,432 3,359 Total operating expenses 1,052 3,744 10,508 7,390 Other expenses Interest expense 3,018 40,001 43,831 77,512 Loss on termination of interest rate swaps 440 — 440 — Loss on Loans held for sale — — 7,654 — Total other expenses 3,458 40,001 51,925 77,512 Income tax expense 6 — 11 — Net income from discontinued operations $ 1,395 $ 51,379 $ 25,615 $ 116,332 Related Parties We entered into various agreements with Ocwen and Altisource Portfolio Solutions, S.A. (“Altisource”) in connection with our Initial Public Offering on March 5, 2012. William C. Erbey, our founder and the former Chairman of our Board of Directors until January 16, 2015, was also the Chairman of the Board of Directors of Ocwen and Altisource until January 16, 2015. We conducted a substantial amount of business with Ocwen and were heavily reliant on Ocwen and Altisource in the conduct of our operations. Our results of operations may have differed significantly from our reported results if we did not have agreements in place with Ocwen and Altisource. See Note 17 for further discussion. Other Recent Developments As a result of an Ocwen settlement agreement on December 22, 2014 with the New York Department of Financial Services, William C. Erbey stepped down as non-executive Chairman of the Board of Directors of the Company, Ocwen, Altisource, Altisource Asset Management Corporation and Altisource Residential Corporation on January 16, 2015. Concurrently, Robert J. McGinnis was appointed as non-executive Chairman of HLSS. On April 27, 2015, in accordance with the Liquidation Plan, we distributed to our shareholders approximately $1.2 billion or $16.613 per ordinary share, which amount represented the net proceeds received by the Company in connection with the Asset Sale, less a cash reserve in the amount of $50 million . On April 29, 2015, our shares were delisted from The Nasdaq Stock Market LLC and began being quoted on the OTC Pink Marketplace under the symbol “HLSSF” and were subsequently deregistered under Section 12(b) of the Securities Exchange Act of 1934, as amended. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Use of Estimates We prepared the accompanying unaudited Interim Condensed Consolidated Financial Statements in conformity with the instructions of the Securities and Exchange Commission (“SEC”) to Form 10-Q for interim financial statements. In our opinion, the accompanying unaudited financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Material estimates that are particularly significant relate to our fair value measurements of Notes receivable – Rights to MSRs. Certain disclosures included in the Company’s Annual Report are not required to be included on an interim basis in the Company’s Quarterly Reports on Forms 10-Q. The Company has condensed or omitted these disclosures. Therefore, this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , which was filed with the SEC on April 6, 2015 (the "2014 Form 10-K"). Going-Concern Basis of Accounting – Periods Prior to April 6, 2015 The Interim Condensed Consolidated Financial Statements for the quarter-to-date and year-to-date periods ended April 5, 2015, as of December 31, 2014 and for the three and six months ended June 30, 2014 were prepared on the going-concern basis of accounting, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Prior period financial statements have not been restated under the liquidation basis of accounting. Liquidation Basis of Accounting – Periods Beginning on and Subsequent to April 6, 2015 On April 6, 2015, the Company adopted the Liquidation Plan; therefore, the Company has applied the liquidation basis of accounting on a prospective basis from the date of adoption of the Liquidation Plan in accordance with GAAP. The liquidation basis of accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the plan of liquidation and requires management to make estimates that affect the amounts reported in the financial statements and the related notes. To the extent there are any changes in the Company’s initial estimates, there will be changes reflected in the Interim Condensed Statement of Changes in Net Assets (Liquidation Basis). As cash is received or paid, consistent with the Company’s initial estimates, there will be no change to the Net assets. Results could differ from these estimates and may affect the net assets in liquidation and actual cash flows. Effective April 6, 2015, the Company adopted the provisions of Accounting Standards Update ("ASU") 2013-07, which clarifies when an entity should apply the liquidation basis of accounting. In addition, the ASU provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. In accordance with the liquidation basis of accounting, the Company has accrued anticipated income and expense through the wind-down period. Estimated income to be earned during liquidation includes interest income on operating cash accounts of $17 . Reserve for estimated costs during the period of liquidation includes Compensation and benefits of $176 , legal and professional fees of $255 and general operating expenses during wind-down period of $29 . All obligations are expected to be settled in cash. The Company expects to complete its wind-down during October 2015; however, the actual date of completion may be significantly different. Principles of Consolidation Our financial statements prior to April 6, 2015 include the accounts of Home Loan Servicing Solutions, Ltd. and its former wholly owned subsidiaries as well as four variable interest entities (“VIE”) of which we were the primary beneficiary. We eliminated intercompany accounts and transactions in consolidation. Upon the consummation of the Asset Sale, the Company divested of all of its former wholly owned subsidiaries, including the VIEs. Accordingly, the financial statements beginning on and subsequent to April 6, 2015 include only the accounts of Home Loan Servicing Solutions, Ltd. We evaluated each special purpose entity (“SPE”) for classification as a VIE. When a SPE met the definition of a VIE and we determined that HLSS was the primary beneficiary, we included the SPE in our Interim Condensed Consolidated Financial Statements. Our Match funded advances were in two SPEs along with related Match funded liabilities (the "Match Funded Advance SPEs"). We determined that these SPEs were VIEs of which we were the primary beneficiaries. The accounts of these SPEs were included in our Interim Condensed Consolidated Financial Statements. Match funded advances on loans serviced for others resulted from our transfers of residential loan servicing advances to SPEs in exchange for cash. The SPEs issued debt supported by collections on the transferred advances. We made these transfers under the terms of our advance facility agreements. These transfers did not qualify for sale accounting because we retained control over the transferred assets. As a result, we accounted for these transfers as financings and classified the transferred advances on our Interim Condensed Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities. We used collections on the Match funded advances pledged to the SPEs to repay principal and to pay interest and the expenses of the SPEs. Holders of the debt issued by the SPEs could look only to the assets of the entity itself for satisfaction of the debt and had no recourse against HLSS. As of December 31, 2014, our Loans held for investment were in two SPEs along with the related Other borrowings (the "Mortgage Loans SPEs"). We determined that these SPEs were VIEs of which we were the primary beneficiaries. The accounts of these SPEs were included in our Interim Condensed Consolidated Financial Statements. (See discussion of the reclassification of our loans to held for sale below.) Our whole loans were transferred to SPEs in exchange for cash, and the SPEs issued debt collateralized by these loans. These transfers did not qualify for sale accounting because we retained control over the transferred assets. As a result, we accounted for these transfers as financings and classified the transferred loans on our Interim Condensed Consolidated Balance Sheet at December 31, 2014 as Loans held for investment and the related liabilities as Other borrowings. We used collections on our whole loans pledged to the SPEs to repay principal and to pay interest and the expenses of the SPEs. Holders of the debt issued by the SPEs could look beyond the assets of the SPEs for satisfaction of the debt and therefore had recourse against HLSS. It was our expectation that the cash flows of the SPEs would be sufficient to meet all claims of the debt holders. HLSS was responsible for making any principal or interest payments to the debt holders not covered by the cash flows of the SPEs. The following tables summarize the assets and liabilities of our consolidated SPEs at December 31, 2014: At December 31, 2014 Match Funded Advance SPEs Mortgage Loans SPEs Total Match funded advances $ 6,121,595 $ — $ 6,121,595 Loans held for investment — 815,663 815,663 Related party receivables (1) — 3,885 3,885 Other assets (2) 134,955 139,114 274,069 Total assets $ 6,256,550 $ 958,662 $ 7,215,212 Match funded liabilities $ 5,624,088 $ — $ 5,624,088 Other borrowings (3) — 815,986 815,986 Related party payables 5,285 794 6,079 Other liabilities 4,951 4,308 9,259 Total liabilities $ 5,634,324 $ 821,088 $ 6,455,412 (1) Related party receivables principally included Match funded advance collections that were in-transit to pay down our Match funded liabilities as of each presented period. See Note 17 for more information about our Related party receivables. (2) Other assets principally included debt service accounts, claims receivable from the FHA and debt issuance costs. See Note 6 for more information about our Other assets. (3) Other borrowings included the carrying value of our borrowings to acquire Loans held for investment. See Note 8 for more information about our Other borrowings. Loans Held for Sale Effective March 31, 2015, we reclassified our Loans held for investment to Loans held for sale based on a change in management’s intention and a decision to actively market the Government National Mortgage Association (“GNMA”) early buy-out (“EBO”) loans for sale. Loans held for sale were reported at the lower of cost or fair value. As of December 31, 2014, both the portfolio of re-performing loans (“RPLs”) and GNMA EBO loans were classified as Loans held for investment based on management’s intent to hold these loans for investment. As further discussed below, we sold our RPL portfolios during the first quarter of 2015. The Company evaluated purchased loans that were not deemed impaired upon acquisition in accordance with the provisions of Accounting Standards Codification ("ASC") 310-20, Receivables - Nonrefundable Fees and Other Costs. Only our GNMA EBO loans were accounted for under ASC 310-20; therefore, interest income was accrued at the amount that we were guaranteed to receive under either the related purchase agreement or by the Federal Housing Administration ("FHA"), which was the amount of interest we ultimately expected to receive. In connection with the reclassification of the GNMA EBO loans to held for sale, we recorded a valuation allowance of $7,654 to record the loans at the lower of cost or fair value. Fair value was determined by reference to counterparty quotations. Effective December 31, 2014, we adopted the provisions of ASU 2014-04. This ASU requires that when an in substance repossession or foreclosure occurs; that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. This amendment did not have a material impact on our Interim Condensed Consolidated Financial Statements. Effective December 31, 2014, we adopted the provisions of ASU 2014-14. Therefore, upon foreclosure of GNMA EBO loans for which we have made or intend to make a claim on the FHA guarantee, we reclassify the carrying amount of the loan to Claims receivable from FHA, which is recorded within Other assets on our Interim Condensed Consolidated Balance Sheets. As a result of our adoption of this ASU, we classified foreclosed properties and outstanding FHA claims as Claims receivable from FHA within our Other assets. See Note 6 for further information. On February 20, 2015, we sold our RPL portfolio to an unrelated third party purchaser for a total purchase price of $337.6 million , subject to a 5% holdback pending completion of the purchaser's due diligence. A portion of the sale proceeds were used to terminate a facility to partially finance our RPLs (the "RPL Facility"). We recognized an immaterial gain on this sale. Recent Accounting Pronouncements ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . This ASU eliminates the concept of an extraordinary item from GAAP. To be considered an extraordinary item under existing GAAP, an event or transaction must be unusual in nature and must occur infrequently. As a result, an entity will no longer (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; and (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, the ASU does not affect the reporting and disclosure requirements for an event that is unusual in nature or that occurs infrequently. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods, any may be applied prospectively or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted if the guidance is applied as of the beginning of the annual period of adoption. The adoption of ASU 2015-01 is not expected to have a material impact on the Company’s financial statements. ASU 2015-02, Amendments to the Consolidation Analysis . This ASU is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU focuses on the consolidation evaluation for reporting organizations (public and private companies and not-for-profit organizations) that are required to evaluate whether they should consolidate certain legal entities. In addition to reducing the number of consolidation models from four to two, the ASU places more emphasis on risk of loss when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in certain circumstances based solely on its fee arrangement, when certain criteria are met, reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a VIE, changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or VIEs. The ASU will be effective for periods beginning after December 15, 2015, and early adoption is permitted, including adoption in an interim period. The adoption of this ASU is not expected to have a material impact on the Company’s financial statements. ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs . To simplify presentation of debt issuance costs, the amendments in this ASU will require that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of related debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by these amendments. This ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods, and early adoption is permitted. Had the Company adopted the provisions of this ASU, the impact to the Interim Condensed Statement of Net Assets would have been immaterial, and the impact to the Interim Condensed Consolidated Balance Sheet as of December 31, 2014 would have been to reduce Other assets and Total assets each by $16,706 , to reduce Match funded liabilities by $11,534 , to reduce Other borrowings by $5,172 and to reduce Total liabilities by $16,706 . |
Asset Acquisitions
Asset Acquisitions | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Asset Acquisitions | ASSET ACQUISITIONS With the exception of servicing advances purchased in the ordinary course of our prior business activities with Ocwen, we did not conduct any asset acquisitions during 2015. On March 3, 2014 , we acquired GNMA EBO loans with UPB of $549,411 from Ocwen. Because these loans earn interest at a rate that is higher than current market rates, the loans were purchased at a premium to par, resulting in a total purchase price of $556,618 . These loans were insured by the FHA, making the collectability of the entire balance of these loans reasonably assured. At acquisition and at December 31, 2014, we accounted for these GNMA EBO loans as Loans held for investment. Effective March 31, 2015, we reclassified the GNMA EBO loans to Loans held for sale. Ocwen initially acquired these loans through the GNMA early buy-out program, which allows servicers of federally insured or guaranteed loans to buy delinquent loans from the applicable loan securitization pools. We also financed the GNMA EBO servicing advances related to the GNMA EBO loans, and we accounted for this arrangement as a financing transaction because Ocwen retained title and all other rights and rewards associated with the GNMA EBO servicing advances. Collectively, the purchase of GNMA EBO loans and financing of the related advances are referred to as the “EBO Pool 1 Transaction.” Our GNMA EBO loans were in a Mortgage Loans SPE along with the related financing facility (the "EBO Facility"), which is more fully described in Note 8. The accounts of this SPE were included in our Interim Condensed Consolidated Financial Statements for periods prior to April 6, 2015. These transfers to the SPE did not qualify for sale accounting because we retained control over the transferred assets. Prior to April 6, 2015, we accounted for these transfers as financings and classified the transferred GNMA EBO loans on our Interim Condensed Consolidated Balance Sheet as Loans held for sale (at December 31, 2014, as Loans held for investment) and the related liabilities as Other borrowings. We used collections on the GNMA EBO loans pledged to the SPE to repay principal and to pay interest and the expenses of the entity. The holders of the debt issued by this SPE could look beyond the assets of the SPE for satisfaction of the debt and therefore had recourse against HLSS. It was our expectation that, since our GNMA EBO loans were insured by the FHA, the cash flows of this SPE would be sufficient to meet all claims of the debt holders. HLSS was responsible for making any principal or interest payments to the debt holders not covered by the cash flows of the SPE. On June 27, 2014, HLSS purchased a portfolio of RPLs from a third party seller with a UPB of $396,939 (the "RPL Transaction"). Because RPLs have historically experienced default conditions, are not insured by any agency and earn interest at a rate that is lower than current market rates, the loans were purchased at a discount of par equivalent to thirty percent of UPB, resulting in a total purchase price of $276,248 . These loans were purchased credit impaired. In accordance with ASC 310-30, we recognized the excess cash flows over the purchase price as interest income on a level yield basis. We accounted for these RPLs as Loans held for investment at December 31, 2014. Ocwen serviced the RPLs prior to the RPL Transaction, and Ocwen remained the servicer subsequent to the RPL Transaction. Our RPLs were in a Mortgage Loans SPE along with the related financing facility (the “RPL Facility”), which is more fully described in Note 8. The accounts of this SPE were included in our Interim Condensed Consolidated Financial Statements for periods prior to April 6, 2015. The transfers to the SPE did not qualify for sale accounting because we retained control over the transferred assets. Prior to April 6, 2015, we accounted for these transfers as financing and classified the transferred RPLs on our Interim Condensed Consolidated Balance Sheet as Loans held for investment and the related liabilities as Other borrowings. We used collections on the RPLs pledged to the SPE to repay principal and to pay interest and the expenses of the entity. The holders of the debt issued by this SPE could look beyond the assets of the SPE for satisfaction of the debt and therefore had recourse against HLSS. It was our expectation that the cash flows of this SPE would be sufficient to meet all claims of the debt holders. HLSS was responsible for making any principal or interest payments to the debt holders not covered by the cash flows of the SPE. The following table summarizes the purcha se price of assets we acquired during the six months ended June 30, 2014 and reconciles the cash used to acquire such assets: GNMA EBO loans purchase price (1) $ 556,618 RPL purchase price (1) 276,248 Total cash required $ 832,866 Sources: Cash on hand $ 141,214 Other borrowings 691,652 Total cash used $ 832,866 (1) The cash used to purchase these assets is shown within “Purchase of loans held for investment” of the 2014 Interim Condensed Consolidated Statement of Cash Flows. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS We estimated fair value based on a hierarchy that maximized the use of observable inputs and minimized the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assessment of the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques into three broad levels and gives the highest priority to Level 1 inputs and the lowest to Level 3 inputs. The three broad categories are: • Level 1: Quoted prices in active markets for identical assets or liabilities; • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and • Level 3: Unobservable inputs for the asset or liability. Where available, we utilized quoted market prices or observable inputs rather than unobservable inputs to determine fair value. We classified assets and liabilities in their entirety based on the lowest level of input that was significant to the fair value measurement. We describe the methodologies that we used and key assumptions that we made to assess the fair value of instruments in more detail below. Notes Receivable – Rights to MSRs We established the value of the Notes receivable – Rights to MSRs based on appraisals prepared by independent valuation firms. These appraisals are prepared on a quarterly basis. Significant inputs into the valuation include the following: • Discount rates reflecting the risk of earning the future income streams from the Notes receivable – Rights to MSRs; • Interest rate used for calculating the cost of financing servicing advances; • Mortgage loan prepayment projections; and • Delinquency rate projections. The independent valuation firms reviewed the collateral attributes and the historical payment performance of the underlying mortgage servicing portfolio and compared them with similar mortgage servicing portfolios and with standard industry mortgage performance benchmarks. The selected collateral attributes and performance comparisons utilized were the voluntary prepayment performance, delinquency and foreclosure performance, operational cost comparison, average loan balance, weighted average coupon and note rate distribution, loan product type classification, geographic distribution and servicing advance behavior. The unobservable inputs that had the most significant effect on the fair value of Notes receivable – Rights to MSRs were the mortgage loan prepayment rate projections and delinquency rate projections; however, any significant increase (decrease) in discount rates, interest rates, mortgage loan prepayment projections or delinquency rate projections, each in isolation, would result in a substantially lower (higher) valuation. Loans Held for Sale Effective March 31, 2015, we reclassified all of our Loans held for investment to Loans held for sale. Loans held for sale were reported at the lower of cost or fair market value, which was determined by reference to counterparty quotations. The fair value measurements for Loans held for sale were categorized as Level 3. Derivative Financial Instruments Our derivatives were not exchange-traded, and therefore quoted market prices or other observable inputs were not available. The fair value of our interest rate swap agreements was based on certain information provided by third-party pricing sources. Third-party valuations were derived from proprietary models based on inputs that included yield curves and contractual terms such as fixed interest rates and payment dates. We did not adjust the information obtained from the third-party pricing sources; however, we reviewed this information to ensure that it provided a reasonable basis for estimating fair value. Our review was designed to identify information that appeared stale, information that had changed significantly from the prior period and other indicators that the information may not have been accurate. We determined that potential credit and counterparty risks had an immaterial impact on the valuation of our derivatives. See Note 11 for additional information on our derivative financial instruments. The following tables present assets by level within the fair value hierarchy that were measured at fair value on a recurring basis. At December 31, 2014, we had no assets measured at fair value on a non-recurring basis. At December 31, 2014: Fair Value Level 1 Level 2 Level 3 Measured at fair value on a recurring basis: Assets: Notes receivable – Rights to MSRs $ 614,465 $ — $ — $ 614,465 Derivative financial instruments 1,370 — — 1,370 Total assets $ 615,835 $ — $ — $ 615,835 Liabilities: Derivative financial instruments $ 211 $ — $ — $ 211 Total liabilities $ 211 $ — $ — $ 211 No transfers between levels occurred during the quarter-to-date and year-to-date periods ended April 5, 2015 or the three and six months ended June 30, 2014 . The following tables present reconciliations of the fair value and changes in fair value of our Level 3 assets and liabilities that we measure at fair value on a recurring basis: For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 Notes receivable – Rights to MSRs Derivative Notes receivable – Rights to MSRs Derivative Beginning balance $ 594,417 $ (1,230 ) $ 637,794 $ 3,079 Purchases and reductions: Purchases — — — — Reductions (1,129 ) — (4,190 ) — (1,129 ) — (4,190 ) — Changes in fair value: Included in net income (1) — (440 ) (4,025 ) — Included in other comprehensive income (2) — — — (1,778 ) — (440 ) (4,025 ) (1,778 ) Transfers in or out of Level 3 — — — — Ending balance $ 593,288 $ (1,670 ) $ 629,579 $ 1,301 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Notes receivable – Rights to MSRs Derivative Notes receivable – Rights to MSRs Derivative Beginning balance $ 614,465 $ 1,159 $ 633,769 $ 3,306 Purchases and reductions: Purchases — — — — Reductions (17,498 ) — (4,190 ) — (17,498 ) — (4,190 ) — Changes in fair value: Included in net income (1) (3,679 ) (440 ) — — Included in other comprehensive income (2) — (2,389 ) — (2,005 ) (3,679 ) (2,829 ) — (2,005 ) Transfers in or out of Level 3 — — — — Ending balance $ 593,288 $ (1,670 ) $ 629,579 $ 1,301 (1) At each reporting date, we determined the fair value of our Notes receivable – Rights to MSRs and adjusted the carrying value to this amount, and these changes in fair value were included in Interest income in the Interim Condensed Consolidated Statements of Operations prior to April 6, 2015. See Note 12 for additional information regarding our Interest income. (2) For the quarter-to-date and year-to-date periods ended April 5, 2015, none of the pre-tax losses were attributable to derivatives still held at the end of the period. For the three and six months ended June 30, 2014, all of the pre-tax gains (losses) were attributable to derivatives still held at the end of the period. The following table shows the effect on the fair value of the Notes receivable – Rights to MSRs assuming adverse changes to certain key assumptions used in valuing these assets at December 31, 2014 : Discount Rate Prepayment Speeds Delinquency Rates 100 bps adverse change 200 bps adverse change 10% adverse change 20% adverse change 10% adverse change 20% adverse change At December 31, 2014: Notes receivable – Rights to MSRs $ (10,061 ) $ (19,821 ) $ (17,719 ) $ (34,537 ) $ (55,410 ) $ (108,567 ) This sensitivity analysis above assumed a change was made to one key input while holding all other inputs constant. As many of these inputs were correlated, a change in one input would likely have impacted other inputs, which ultimately would have impacted the overall valuation. The following table provides additional quantitative information on our significant inputs used for valuing our Notes receivable – Rights to MSRs as of December 31, 2014 : Asset Unobservable Input Low High Weighted Average Notes receivable – Rights to MSRs Discount Rate 14 % 22 % 19 % Prepayment Speeds 13 % 29 % 19 % Delinquency Rates 15 % 35 % 25 % Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value: December 31, 2014 December 31, 2014 Carrying Value Fair Value Financial assets: Match funded advances $ 6,121,595 $ 6,121,595 Loans held for investment 815,663 822,298 Total financial assets $ 6,937,258 $ 6,943,893 Financial liabilities: Match funded liabilities $ 5,624,088 $ 5,618,263 Other borrowings 1,182,328 1,167,267 Total financial liabilities $ 6,806,416 $ 6,785,530 Match Funded Advances The carrying value of our Match funded advances approximated fair value. This was because our Match funded advances had no stated maturity, generally were realized within a relatively short period of time and did not bear interest. The fair value measurements for Match funded advances were categorized as Level 3. Loans Held for Investment The fair value estimate of our Loans held for investment was determined by using internal cash flow models that required us to make assumptions regarding various inputs, including default rates, delinquency rates, interest rates and prepayment speeds. Additionally, we made assumptions related to severity for our RPLs. The fair value measurements for Loans held for investment were categorized as Level 3. Match Funded Liabilities Match funded liabilities included various series of term notes, variable funding notes and other fixed rate liabilities. The fair value estimate of the Company’s term notes and other fixed rate liabilities was determined by using broker quotes. We concluded that no adjustments were required to the quoted prices. The level of trading, both in number of trades and amount of term notes traded, was at a level that the Company believed broker quotes to be a reasonable representation of the current fair market value of the term notes. All other Match funded liabilities were short term in nature, and the carrying value generally approximated the fair value. The fair value measurements for Match funded liabilities were categorized as Level 3. Other Borrowings Other borrowings included a senior secured term loan facility, the EBO Facility, the RPL Facility and a servicing advance note facility (the "Note Facility"). The fair value estimate of the senior secured term loan facility was determined by using broker quotes. We concluded that no adjustments were required to the quoted price. Trading was at a level that the Company believed broker quotes to be a reasonable representation of the current fair market value of this facility. The EBO Facility, the RPL Facility and the Note Facility were short term in nature, and the carrying values generally approximated the fair values. The fair value measurements for these facilities were categorized as Level 3. We repaid the RPL Facility in full on February 20, 2015 in conjunction with the sale of our RPL portfolios. |
Match Funded Advances
Match Funded Advances | 6 Months Ended |
Jun. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Match Funded Advances | MATCH FUNDED ADVANCES Match funded advances on residential loans were comprised of the following: December 31, Principal and interest advances $ 2,539,532 Taxes and insurance advances 2,748,700 Corporate advances 833,363 $ 6,121,595 |
Loans Held for Sale
Loans Held for Sale | 6 Months Ended |
Jun. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Loans Held for Sale | LOANS HELD FOR SALE Our Loans held for investment at December 31, 2014 related to our GNMA EBO loans and RPLs, which were our only classes of Loans held for investment. Effective March 31, 2015, we reclassified all of our Loans held for investment to Loans held for sale. December 31, 2014 Loans held for investment: GNMA EBO loans $ 477,016 RPLs 338,647 Loans held for investment $ 815,663 Upon acquisition, the Company reviewed whole loans to determine if there was evidence of credit deterioration since origination in accordance with the provisions of ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality . Any loan acquired was considered impaired if there was evidence of credit deterioration since origination and if it was probable that not all contractually required payments would be collected. We accounted for acquired Loans held for investment that were not deemed to be impaired at acquisition under ASC 310-20, Receivables - Nonrefundable Fees and Other Costs . GNMA EBO Loans We initially accounted for our GNMA EBO loans as Loans held for investment under ASC 310-20, Receivables - Nonrefundable Fees and Other Costs . In accordance with ASC 310-20-30-5, these loans were initially recorded at the UPB plus or minus a purchase premium or discount, which is the amount we paid to purchase these loans. Effective March 31, 2015, we reclassified these loans to Loans held for sale, which were carried at the lower of cost or fair market value. During the year-to-date period ended April 5, 2015, we recognized a decrease in the fair value of $7,654 . RPLs We accounted for our RPLs under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality . The Company evaluated all of the RPLs at acquisition in accordance with the provisions of ASC 310-30, and all RPLs were deemed to be impaired loans at acquisition. The RPLs were not insured against loss, and the borrowers, all of whom had been previously delinquent, may have been more likely to be in economic distress, to have become unemployed or bankrupt or to otherwise be unable or unwilling to make payments when due. Also, a portion of these loans featured future step-ups in the required payment. The RPLs were grouped into pools based on common risk characteristics, and the pools were recorded at their estimated fair values, which incorporated estimated credit losses at the acquisition date. The RPL pools were systematically reviewed by the Company to determine the risk of losses that may have exceeded those identified at the time of the acquisition. No individual RPLs were classified as nonperforming assets at any time while held by the Company as the loans were accounted for on a pooled basis, and the pools were considered to be performing. No RPL pools evaluated by the Company were determined to have experienced impairment in the estimated credit quality or cash flows since acquisition. The amount of the estimated cash flows expected to be received from the RPL pools in excess of the fair values recorded for the RPL pools was referred to as the accretable yield. The accretable yield was recognized as interest income over the estimated lives of the RPL pools. The Company made no adjustments to the accretable yield. Changes in the carrying amount of the accretable yield for RPL pools were as follows for the periods indicated: Three months ended June 30, 2014 Accretable Yield Carrying Amount Beginning balance $ — $ — Additions 146,885 276,248 Accretable yield adjustments — — Accretion (159 ) 159 Payments and other reductions, net — (569 ) Ending balance $ 146,726 $ 275,838 For the period January 1, 2015 Six months ended June 30, 2014 Accretable Yield Carrying Amount Accretable Yield Carrying Amount Beginning balance $ 168,968 $ 338,647 $ — $ — Additions — — 146,885 276,248 Accretable yield adjustments — — — — Accretion (1,595 ) 1,595 (159 ) 159 Payments and other reductions, net — (3,588 ) — (569 ) Sale of RPL portfolios (167,373 ) (336,654 ) — — Ending balance $ — $ — $ 146,726 $ 275,838 At the acquisition date of June 27, 2014, the loans acquired had contractually required payments receivable of $ 622.1 million and a fair value of $ 276.2 million. The cash flows expected to be collected were $ 423.1 million at the acquisition date. On February 20, 2015, we sold our RPL portfolio to an unrelated third party purchaser for a total purchase price of $337.6 million , subject to a 5% holdback pending completion of the purchaser's due diligence. A portion of the sale proceeds were used to terminate the RPL Facility. We recognized an immaterial gain on this sale. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | OTHER ASSETS Other assets consisted of the following at December 31, 2014: December 31, Debt service accounts (1) $ 128,525 Claims receivable from FHA (2) 109,586 Debt issuance costs (3) 16,706 Accrued interest income (4) 22,661 Interest-earning collateral deposits (5) 1,077 Derivative financial instruments (6) 1,370 Other 1,550 $ 281,475 (1) Under our advance funding facilities, we were contractually required to remit collections of Match funded advances to the trustee within two days of receipt. We did not use the collected funds to reduce the related Match funded liabilities until the payment dates specified in the indenture. The balance also included amounts that we set aside to provide for possible shortfalls in the funds available to pay certain expenses and interest. Lastly, this balance included collections on our whole loans, which were used to pay down a portion of our Other borrowings on the first funding date following quarter end. (2) Claims receivable from FHA related to GNMA EBO loans for which foreclosure had been completed and for which we made or intended to make a claim on the FHA guarantee. (3) Debt issuance costs related to Match funded liabilities and Other borrowings. We amortized these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (4) Accrued interest income represented interest earned but not yet collected on our whole loans. (5) Interest-earning collateral deposits represented cash collateral held by our counterparty as part of our interest rate swap agreements. (6) See Notes 3 and 11 for more information regarding our use of derivatives. |
Match Funded Liabilities
Match Funded Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Text Block [Abstract] | |
Match Funded Liabilities | MATCH FUNDED LIABILITIES Match funded liabilities were comprised of the following at December 31, 2014: Borrowing Type (1) Interest Rate Maturity (2) Amortization Date (2) Unused Borrowing Capacity (3) Balance Outstanding Series 2012 T2 Term Notes 199 – 494 bps Oct. 2045 Oct. 2015 $ — $ 450,000 Series 2013 T1 Term Notes 150 – 323 bps Jan. 2046 Jan. 2016 — 350,000 Series 2013 T1 Term Notes 229 – 446 bps Jan. 2048 Jan. 2018 — 150,000 Series 2013 T2 Term Notes 115 – 239 bps May 2044 May 2015 — 375,000 Series 2013 T3 Term Notes 179 – 313 bps May 2046 May 2017 — 475,000 Series 2013 T5 Term Notes 198 – 331 bps Aug. 2046 Aug. 2016 — 200,000 Series 2013 T7 Term Notes 198 – 302 bps Nov. 2046 Nov. 2016 — 300,000 Series 2014 T1 Term Notes 124 – 229 bps Jan. 2045 Jan. 2015 — 600,000 Series 2014 T2 Term Notes 222 – 311 bps Jan. 2047 Jan. 2017 — 200,000 Series 2014 T3 Term Notes 281 bps Jun. 2048 Jun. 2018 — 363,000 Series 2012 VF 1 Notes 1-Month LIBOR + 110 – 340 bps Aug. 2045 Aug. 2015 143,673 556,327 Series 2012 VF 2 Notes 1-Month LIBOR + 110 – 340 bps Aug. 2045 Aug. 2015 143,673 556,327 Series 2012 VF 3 Notes 1-Month LIBOR + 110 – 340 bps Aug. 2045 Aug. 2015 143,673 556,327 Series 2013 VF 1 Notes 1-Month LIBOR + 150 - 245 bps Feb. 2045 Dec. 2015 57,893 492,107 $ 488,912 $ 5,624,088 (1) Each term note and variable funding note issuance had four classes, an A, B, C, and D class, with the exception of the Series 2014 T3 Term Notes which had only an A and B class. The Series 2014 T3 Class B Term Notes was exchangeable for notes in three separate classes: BX, CX and DX. (2) The amortization date was the date on which the revolving period ended under each advance facility note and repayment of the outstanding balance began if the note was not renewed or extended. The maturity date was the due date for all outstanding balances. After the amortization date, all collections that represented the repayment of Match funded advances pledged to the facilities were applied to reduce the balance of the note outstanding, and any new advances were ineligible to be financed. (3) Our unused borrowing capacity was available to us if we had additional eligible collateral to pledge and met other borrowing conditions. We paid a 0.50% or 0.625% fee on the unused borrowing capacity, which varied by facility. In conjunction with the Asset Sale, Home Loan Servicing Solutions, Ltd. ceased to be party to the Match funded liabilities. |
Other Borrowings
Other Borrowings | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Other Borrowings | OTHER BORROWINGS Other borrowings consisted of the following at December 31, 2014: December 31, 2014 Senior secured term loan facility (1) $ 340,636 EBO Facility (2) 544,513 RPL Facility (3) 271,473 Note Facility (4) 25,706 $ 1,182,328 (1) On June 27, 2013, we entered into a $350,000 senior secured term loan facility, which was issued at a discount to par. The senior secured term loan facility had a maturity date of June 27, 2020 and an interest rate of 1-Month LIBOR plus 350 bps, with a 1.00% LIBOR floor . As of December 31, 2014, the interest rate on our senior secured term loan facility was 4.50% . (2) On March 3, 2014, we entered into the EBO Facility to partially finance the purchase of our initial portfolio of GNMA EBO loans at an interest rate of 1-Month LIBOR plus 305 bps. On October 16, 2014, we amended the EBO Facility to increase the maximum principal balance to partially finance the purchase of a second pool of GNMA EBO loans at an interest rate of 1-Month LIBOR plus 180 bps. This facility had a maturity date of May 1, 2015. (3) On June 26, 2014, we entered into the RPL Facility to partially finance the purchase of our RPLs. The facility had a maturity date of June 26, 2014 and an interest rate of 1-Month LIBOR plus 250 bps. We repaid the RPL Facility in full on February 20, 2015 in conjunction with the sale of our RPL portfolios. (4) On June 24, 2014, we entered into the Note Facility to partially finance the purchase of $37,000 of notes retained as part of the Series 2014 T3 Term Note issuance on June 18, 2014 . The Note Facility matured quarterly and had an interest rate of 1-Month LIBOR plus 115 bps. Immediately prior to the Asset Sale, we repaid our senior secured term loan facility in full at par. In conjunction with the Asset Sale, Home Loan Servicing Solutions, Ltd. ceased to be party to the Other borrowings. |
Ordinary Shares
Ordinary Shares | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Ordinary Shares | ORDINARY SHARES As of June 30, 2015, we had authorized 200,000,000 ordinary shares, par value of $0.01 , of which 71,016,771 were issued and outstanding. There were no changes in the number of ordinary shares issued during the period April 6, 2015 to June 30, 2015, the quarter-to-date and year-to-date periods ended April 5, 2015, or the three and six months ended June 30, 2014. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE ("EPS") Basic EPS was computed by dividing reported Net income available to ordinary shareholders by weighted average number of ordinary shares outstanding during each period. Diluted EPS was computed by dividing reported Net income by the sum of the weighted average ordinary shares and all potential dilutive ordinary shares outstanding during the period. Potential dilutive ordinary shares included ordinary share equivalents consisting of incremental ordinary shares deemed outstanding from the assumed exercise of stock options. The following tables reconcile the numerators and denominators of the basic and diluted EPS for the periods indicated: (In thousands, except per share data) For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 Net Income Shares Earnings Per Share Amount Net Income Shares Earnings Per Share Amount Basic EPS: Net (loss) income available to common shareholders $ 1,198 71,016,771 $ 50,660 71,016,771 Less: Net income allocated to participating securities (7 ) — — — Adjusted net income available to common shareholders 1,191 71,016,771 $ 0.02 50,660 71,016,771 $ 0.71 Dilutive Securities: Plus: Net income allocated to participating securities 7 — — — Less: Net income re-allocated to participating securities (7 ) — — — Incremental ordinary shares deemed outstanding — 12,500 — — Diluted EPS: Income allocated to common shares and assumed share conversions $ 1,191 71,029,271 $ 0.02 $ 50,660 71,016,771 $ 0.71 (In thousands, except per share data) For the period January 1, 2015 to April 5, 2015 For the six months ended Net Income Shares Earnings Per Share Amount Net Income Shares Earnings Per Share Amount Basic EPS: Net income available to common shareholders $ 16,458 71,016,771 $ 115,020 71,016,771 Less: Net income allocated to participating securities (21 ) — — — Adjusted net income available to common shareholders 16,437 71,016,771 $ 0.23 115,020 71,016,771 $ 1.62 Dilutive Securities: Plus: Net income allocated to participating securities 21 — — — Less: Net income re-allocated to participating securities (21 ) — — — Incremental ordinary shares deemed outstanding — 67,539 — — Diluted EPS: Income allocated to common shares and assumed share conversions $ 16,437 71,084,310 $ 0.23 $ 115,020 71,016,771 $ 1.62 Stock options excluded from the computation of diluted EPS were as follows for the periods indicated: For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Anti-dilutive (1) 37,500 640,000 37,500 640,000 Market-based (2) 50,000 640,000 50,000 640,000 (1) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. (2) Shares that were issuable upon the achievement of certain performance criteria related to our stock price and an annualized rate of return to investors. Note 14 provides details of our share-based compensation. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS We were party to interest rate swap agreements that we recognized on our Interim Condensed Consolidated Balance Sheets prior to April 6, 2015 at fair value within Other assets and Other liabilities. On the date we entered into the interest rate swap agreements, we designated and documented them as hedges of the variable cash flows payable for floating rate interest expense on our borrowings (cash flow hedge). To qualify for hedge accounting, a derivative must have been highly effective at reducing the risk associated with the hedged exposure. In addition, the documentation must have included the risk management objective and strategy. On a quarterly basis, we assessed and documented the derivatives’ effectiveness and expected effectiveness in offsetting the changes in the fair value or the cash flows of the hedged items. To assess effectiveness, we used statistical methods, such as regression analysis, as well as nonstatistical methods, including dollar-offset analysis. For a cash flow hedge, to the extent that it is effective, we recorded changes in the estimated fair value of the derivative in accumulated other comprehensive income ("AOCI"). We subsequently reclassified these changes in estimated fair value to net income in the same period that the hedged transaction affected earnings and in the same financial statement category as the hedged item. If a derivative instrument in a cash flow hedge was terminated or the hedge designation was removed, we reclassified related amounts in AOCI into earnings in the same period during which the cash flows that were hedged affected earnings. In a period where we determined that it is probable that a hedged forecasted transaction would not occur, such as variable-rate interest payments on debt that has been repaid in advance, any related amounts in AOCI were reclassified into earnings in that period. During April 2015, we terminated all of our interest rate swaps, which resulted in the reclassification of $440 of accumulated other comprehensive losses into earnings. Because our derivative agreements were not exchange-traded, we were exposed to credit loss in the event of nonperformance by the counterparty to the agreement. We controlled this risk through counterparty credit monitoring procedures, including financial analysis, dollar limits and other monitoring procedures. The notional amounts of our contracts did not represent our exposure to credit loss. See Note 3 for additional information regarding our use of derivatives. Interest Rate Management We executed a hedging strategy designed to mitigate the impact of changes in variable interest rates on the excess of interest rate sensitive liabilities over interest rate sensitive assets. We entered into interest rate swaps to hedge against the effects of a change in 1-Month LIBOR . The following tables provide information about our interest rate swaps at December 31, 2014 : Purpose Date Opened Effective Date (1) Maturity We Pay We Receive Balance Sheet Location Notional Amount Fair Value Designated as hedges (2) (3): Hedge the effects of changes in 1-Month LIBOR September 2012 September 2012 August 2017 0.5188 % 1-Month LIBOR Other assets $ 73,888 $ 877 Hedge the effects of changes in 1-Month LIBOR January 2013 January 2016 December 2017 1.3975 % 1-Month LIBOR Other assets 338,009 493 Total asset derivatives designated as hedges as of December 31, 2014 $ 411,897 $ 1,370 Total asset derivatives as of December 31, 2014 $ 411,897 $ 1,370 Purpose Date Opened Effective Date (1) Maturity We Pay We Receive Balance Sheet Location Notional Amount Fair Value Designated as hedges (2) (3): Hedge the effects of changes in 1-Month LIBOR March 2012 March 2012 March 2016 0.6325 % 1-Month LIBOR Other liabilities $ 81,506 $ (209 ) Hedge the effects of changes in 1-Month LIBOR May 2012 May 2012 May 2016 0.6070 % 1-Month LIBOR Other liabilities 17,502 (2 ) Total liability derivatives designated as hedges as of December 31, 2014 $ 99,008 $ (211 ) Total liability derivatives as of December 31, 2014 $ 99,008 $ (211 ) (1) The effective date of the swap was the date from which monthly net settlements began to be computed. (2) Our interest rate swaps were terminated during April 2015 in conjunction with the Asset Sale. The net settlements upon termination were $1,587 payable to the counterparties. (3) There was an unrealized pre-tax loss of $1,778 and $2,005 related to our interest rate swaps included in AOCI for the three and six months ended June 30, 2014 . The following table summarizes our use of derivatives during the periods indicated: For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Notional balance at beginning of period $ 510,905 $ 953,195 Additions — — Maturities — — Terminations (488,813 ) — Amortization (22,092 ) (315,451 ) Notional balance at end of period $ — $ 637,744 We recognized the right to reclaim cash collateral or the obligation to return cash collateral as part of our hedge agreements. At December 31, 2014 , we had the right to reclaim cash collateral of $1,077 and were obligated to return cash collateral of $1,370 as part of our hedge agreements. |
Interest Income
Interest Income | 6 Months Ended |
Jun. 30, 2015 | |
Other Income and Expenses [Abstract] | |
Interest Income | INTEREST INCOME Interest Income – Notes Receivable – Rights to MSRs Our primary source of revenue was the fees we were entitled to receive in connection with the servicing of mortgage loans. We accounted for these fees as interest income, which has been included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A). The following table shows how we calculated Interest income – notes receivable – Rights to MSRs for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Servicing fees collected $ 12,587 $ 185,690 $ 192,884 $ 374,847 Subservicing fee payable to Ocwen (6,097 ) (90,901 ) (97,039 ) (181,545 ) Net servicing fees retained by HLSS 6,490 94,789 95,845 193,302 Reduction in Notes receivable – Rights to MSRs (1,128 ) (4,190 ) (17,497 ) (4,190 ) Servicing transfers (1) — — 1,899 — Increase (decrease) in the fair value of Notes receivable – Rights to MSRs — (4,025 ) (3,679 ) — $ 5,362 $ 86,574 $ 76,568 $ 189,112 (1) Ocwen was required to reimburse us in the event of a transfer of servicing at predetermined contractual rates. These amounts represented amounts payable by Ocwen related to servicing transfers. Interest Income – Other Additional sources of revenue for us were the interest we earned on our GNMA EBO loans, interest we earned on our RPLs, financing of GNMA EBO and other advances and interest we earned on operating bank accounts and the custodial account balances related to the mortgage loans serviced that were not included in our Interim Condensed Consolidated Balance Sheets. The following table shows our Interest income – other for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Continuing operations: Bank account interest (1) $ 1 $ 13 $ 25 $ 30 Discontinued operations: Loan interest (2) 435 5,770 7,843 7,554 Advance financing interest (3) 67 952 1,094 1,154 Bank account interest (4) 40 1,055 1,057 2,013 $ 542 $ 7,777 $ 9,994 $ 10,721 (1) These amounts were included in the Interim Condensed Consolidated Statements of Operations as Interest income – other. (2) Represented interest earned on GNMA EBO loans and the accretion of the accretable yield on our pools of RPLs and was included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A). (3) Represented interest earned on servicing advance financing we provided to Ocwen at a rate of 1-Month LIBOR plus a spread ranging from 450 bps to 550 bps. These amounts were included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A). (4) These amounts were included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A). |
Interest Expense
Interest Expense | 6 Months Ended |
Jun. 30, 2015 | |
Interest Expense [Abstract] | |
Interest Expense | INTEREST EXPENSE The following table presents the components of Interest expense, which is included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A), for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Match funded liabilities $ 2,266 $ 27,126 $ 29,547 $ 53,956 Other borrowings 543 7,961 9,530 13,284 Amortization of debt issuance costs 209 4,598 4,587 9,560 Interest rate swaps — 316 167 712 $ 3,018 $ 40,001 $ 43,831 $ 77,512 |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | SHARE-BASED COMPENSATION On December 5, 2013, the Board of Directors of HLSS adopted the 2013 Equity Incentive Plan (the “Plan”), subject to the approval of the shareholders. At the Annual Meeting of Shareholders on May 13, 2014, the shareholders approved the Plan. The Plan was administered by the Compensation Committee, which could authorize the award of options, restricted shares, share appreciation rights, performance awards or other share-based awards to our employees of an amount not exceeding 2,000,000 ordinary shares, in aggregate. Other than share options with vesting terms, the Compensation Committee did not grant restricted shares, share appreciation rights, performance awards or other share-based awards under the Plan. Each award under the Plan was evidenced by a written award agreement between the participant and HLSS. The award agreement described the award and stated the terms and conditions to which the award was subject. Shares issued under the Plan may have been from shares acquired under the Company's share repurchase program, shares acquired through open market purchases or newly issued shares. Share-based awards granted under the Plan consisted of stock option grants that were a combination of service-based and market-based options. Service-Based Options. These options were granted at fair value on the date of grant. The options generally vested evenly in four annual increments beginning with the first anniversary of the agreement date, and the options generally expired on the earlier of 10 years after the date of grant or following termination of service. Market-Based Options. These options were subject to market-based vesting. One-fourth of the options would have vested immediately on the first date as of which both of the following market-based criteria had been met: i) the per share price was be equal to or exceed 1.25 times the strike price and ii) investors achieved a 12.5% annualized rate of return from the agreement date based on the strike price and dividends received. Thereafter, the remaining options would have vested evenly on each of the next three anniversaries of the initial date of vesting. Both Service-Based Options and Market-Based Options that were vested and outstanding were entitled to receive payments equal to the amount of the then current dividend as if the underlying shares were issued at the ex-dividend date. We recognized $26 of reductions to Retained earnings related to this feature during the year-to-date period ended April 5, 2015. The fair value of the Service-Based Options was determined using the Black-Scholes option pricing model, and a lattice (binomial) model was used to determine the fair value of the Market-Based Options using the following assumptions as of the grant date for the six months ended June 30, 2014: For the six months ended June 30, 2014 Black-Scholes Binomial Risk-free interest rate 2.13 % 0.13% - 3.23% Expected stock price volatility 19.62 % 19.62 % Expected dividend yield 7.82 % 7.82 % Expected option life (in years) 6.5 2.7 - 3.5 Contractual life (in years) 10 10 Fair Value $0.87 - $1.27 $0.53 - $1.43 No awards were granted during 2015. The net benefit from forfeitures of share-based compensation was $145 for the year-to-date period ended April 5, 2015. We recognized share-based compensation expense of $64 for the six months ended June 30, 2014. Share-based compensation is recognized net of an estimated forfeiture rate of 4% . A summary of option activity under the Plan for the year-to-date period ended April 5, 2015 is presented below. Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2014 1,280,000 $ 22.51 9.1 $ — Granted — — Exercised — — Forfeited or expired (1,280,000 ) 22.51 Outstanding at April 5, 2015 — $ — 0.0 $ — Exercisable at April 5, 2015 — $ — 0.0 $ — (1) Intrinsic value represents the difference between the Company’s closing stock price and the exercise price multiplied by the number of options outstanding and exercisable at a price below that closing price. No shares vested during the year-to-date period ended April 5, 2015. During February 2015, as consideration for participation under the Change in Control Retention Bonus and Severance Plan, certain participants in the Plan agreed to unconditionally relinquish any and all rights that the participant possessed under the Plan and agreed to the cancellation of such participant’s stock options. On April 6, 2015, the Plan was terminated in conjunction with the Asset Sale. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income taxes were provided for based upon the tax laws and rates in the countries in which we conduct operations and earn related income. Our effective tax rate for the period April 6, 2015 to June 30, 2015 was 0.0% , and our effective tax rate for the quarter-to-date and year-to-date periods ended April 5, 2015 was 0.0% and 0.0% , respectively ( 0.0% and 0.1% for the three and six months ended June 30, 2014, respectively). We are a Cayman Islands exempted company, and the Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. As of June 30, 2015 , the Company did not have any unrecognized tax benefits related to the current period or any previous period. We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We did not accrue interest or penalties associated with any unrecognized tax benefits, nor was any interest expense or penalty recognized during the period or in previous periods. |
Business Segment Reporting
Business Segment Reporting | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | BUSINESS SEGMENT REPORTING Prior to the Asset Sale, our business strategy focused on acquiring Rights to MSRs and the related servicing advances, whole loans and other residential mortgage-related assets. We operated as a single reportable business segment that held Residential Mortgage Assets. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Effective April 6, 2015, Home Loan Servicing Solutions, Ltd. became externally managed pursuant to a Services Agreement with HLSS Advances. As a result, NRZ, Merger Sub, HLSS Advances and HLSS MSR-EBO were determined to be related parties. At June 30, 2015, Related party receivables consisted of a receivable from NRZ for certain expenses paid by the Company subsequent to the Asset Sale in the amount of $2,170 . We entered into various agreements with Ocwen and Altisource in connection with our Initial Public Offering on March 5, 2012. William C. Erbey, our founder and the former Chairman of our Board of Directors, was also the Chairman of the Board of Directors of Ocwen and Altisource until January 16, 2015. We acquired all of our Notes receivable – Rights to MSRs and our EBO Pool 1 Transaction loans from Ocwen. Refer to Note 2 for a description of our recent acquisitions from Ocwen. As the named servicer of the loans underlying our Notes receivable – Rights to MSRs, Ocwen remained obligated to perform as servicer under the related PSAs, and we were required to pay Ocwen a monthly fee for the servicing activities it performed. We were also required to purchase any servicing advances that Ocwen was required to make pursuant to such PSAs. Ocwen was also the named servicer on the EBO Pool 1 Transaction loans and RPLs, and we were required to pay Ocwen a monthly fee for the servicing activities it performed. We provided financing of certain servicing advances to Ocwen. In conjunction with the EBO Pool 1 Transaction on May 3, 2014, we agreed to finance $20,157 of servicing advances for Ocwen and to finance future advances. We received interest income on these receivables at a rate of 1-month LIBOR plus 450 to 550 bps. We recorded this interest income as Interest income – other in the Interim Condensed Consolidated Statements of Operations. During the quarter-to-date and year-to-date periods ended April 5, 2015, we earned interest income on financing of servicing advances of $67 and $1,094 , respectively ( $952 and $1,154 during the three and six months ended June 30, 2014, respectively). The following table summarizes our transactions with Ocwen related to our Notes receivable – Rights to MSRs for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Servicing fees collected $ 12,587 $ 185,690 $ 192,884 $ 374,847 Subservicing fee payable to Ocwen (6,097 ) (90,901 ) (97,039 ) (181,545 ) Net servicing fees retained by HLSS (1) 6,490 94,789 95,845 193,302 Servicing advances purchased from Ocwen in the ordinary course of prior business activities $ 55,378 $ 3,368,379 $ 3,556,561 $ 6,871,754 (1) Net servicing fees retained by HLSS were included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations. See Note 12 for additional information regarding our Interest income. Ocwen Professional Services Agreement Our former subsidiary, HLSS Management LLC (“HLSS Management”), has a professional services agreement with Ocwen (“Professional Services Agreement”) that enables HLSS Management to provide certain services to Ocwen and for Ocwen to provide certain services to HLSS Management. Services provided by HLSS Management under this agreement may include valuation and analysis of mortgage servicing rights, capital markets activities, advance financing management, treasury management, legal services and other similar services. Services provided by Ocwen under this agreement may include business strategy, legal, tax, licensing and regulatory compliance support services, risk management services and other similar services. The services provided by the parties under this agreement are on an as-needed basis, and the fees represent actual costs incurred plus an additional markup of 15% . Home Loan Servicing Solutions, Ltd. continues to benefit from this agreement. During the quarter-to-date and year-to-date periods ended April 5, 2015, we earned fees of $4 and $54 , respectively, for services provided to Ocwen pursuant to the Professional Services Agreement ( $773 and $1,401 for the three and six months ended June 30, 2014, respectively). Additionally, during the quarter-to-date and year-to-date periods ended April 5, 2015, we incurred fees of $0 for services received from Ocwen pursuant to the Professional Services Agreement ( $225 and $379 for the three and six months ended June 30, 2014, respectively). Altisource Administrative Services Agreement Our former subsidiary, HLSS Management, has an administrative services agreement with Altisource (“Altisource Administrative Services Agreement”) that enables Altisource to provide certain administrative services to HLSS Management. Services provided under this agreement may include human resources administration (benefit plan design, recruiting, hiring and training and compliance support), legal and regulatory compliance support services, general business consulting, corporate services (facilities management, security and travel services), finance and accounting support services (financial analysis, financial reporting and tax services), risk management services, vendor management and other related services. The services Altisource provides under this agreement are on an as-needed basis, and the fees HLSS Management pays Altisource are based on the actual costs incurred by Altisource plus an additional markup of 15% . Home Loan Servicing Solutions, Ltd. continues to benefit from this agreement. During the quarter-to-date and year-to-date periods ended April 5, 2015, we incurred fees of $76 for services provided to us pursuant to the Altisource Administrative Services Agreement ( $271 and $489 for the three and six months ended June 30, 2014, respectively). Receivables from and Payables to Related Parties The following table summarizes amounts receivable from and payable to related parties at December 31, 2014: December 31, 2014 Servicing advance financing receivables (1) $ 84,107 Servicing fees collected (2) 5,686 Professional services (3) 33 Loan collections in transit (4) 3,885 Other 690 Receivables from Ocwen $ 94,401 Subservicing fees payable (5) $ 7,999 Advance purchases (6) 5,285 Other 1,133 Payables to Ocwen $ 14,417 Payables to Altisource $ 86 (1) We provided financing to Ocwen for servicing advances. We received interest income at a rate of 1-Month LIBOR plus a spread ranging from 450 bps to 550 bps. (2) Ocwen was required to remit to us servicing fees it collected on our behalf within two business days. The amount due from Ocwen represents servicing fees collected but not remitted at the end of the month. (3) Represented the amount due for professional services provided that were outstanding as of the end of the period. (4) Upon collection, Ocwen was contractually obligated to remit collections of our Loans held for sale or Loans held for investment to a custodial account. This receivable represents the portion of these collections that were not yet deposited into the custodial account. (5) The base fee and performance fee, if any, that comprised the subservicing fees payable were calculated and paid to Ocwen within three business days following the end of the month. (6) We were contractually obligated to reimburse advances made by Ocwen. This payable represents the portion of advance payments that were due to Ocwen on advances made by them. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The following material potential claims, lawsuits, and other proceedings, of which the Company is currently aware, are as follows. Legal Matters Three putative class action lawsuits have been filed against the Company and certain of its current and former officers and directors in the United States District Court for the Southern District of New York entitled: (i) Oliveira v. Home Loan Servicing Solutions, Ltd., et al. , No. 15-CV-652 (S.D.N.Y.), filed on January 29, 2015; (ii) Berglan v. Home Loan Servicing Solutions, Ltd., et al. , No. 15-CV-947 (S.D.N.Y.), filed on February 9, 2015; and (iii) W. Palm Beach Police Pension Fund v. Home Loan Servicing Solutions, Ltd., et al. , No. 15-CV-1063 (S.D.N.Y.), filed on February 13, 2015. On April 2, 2015, these lawsuits were consolidated into a single action, which is referred to as the “New York Action.” On April 28, 2015, lead plaintiff, lead counsel and liaison counsel were appointed in the New York Action. On July 17, 2015, lead plaintiffs filed their consolidated class action complaint. The New York Action names as defendants HLSS, former HLSS Chairman William C. Erbey, HLSS Director, President, and Chief Executive Officer John P. Van Vlack, and HLSS Chief Financial Officer James E. Lauter. The New York Action asserts causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on certain public disclosures made by the Company relating to, among others, our relationship with Ocwen and our risk management and internal controls. More specifically, the consolidated class action complaint alleges that a series of statements in HLSS’s disclosures were materially false and misleading, including statements about (i) Ocwen’s servicing capabilities; (ii) HLSS’s contingencies and legal proceedings; (iii) its risk management and internal controls and (iv) certain related party transactions. The consolidated class action complaint also appears to allege that HLSS’s financial statements for the years ended 2012 and 2013, and the first quarter ended March 30, 2014, were false and misleading based on the Company’s August 18, 2014 restatement. Lead plaintiffs in the New York Action also allege that the Company misled investors by failing to disclose, among other things, information regarding governmental investigations of Ocwen’s business practices. The Company intends to vigorously defend the New York Action. Two shareholder derivative actions have been filed purportedly on behalf of Ocwen Financial Corporation naming as defendants the Company and certain current and former directors and officers of Ocwen, including former HLSS Chairman William C. Erbey, entitled (i) Sokolowski v. Erbey, et al. , No. 9:14-CV-81601 (S.D. Fla.), filed on December 24, 2014 (the “Sokolowski Action”), and (ii) Moncavage v. Faris, et al. , No. 2015CA003244 (Fla. Palm Beach Cty. Ct.), filed on March 20, 2015 (collectively, with the Sokolowski Action, the “Ocwen Derivative Actions”). The original complaint in the Sokolowski Action named as defendants certain current and former directors and officers of Ocwen, including former HLSS Chairman William C. Erbey. On February 11, 2015, plaintiff in the Sokolowski Action filed an amended complaint naming additional defendants, including HLSS. The Ocwen Derivative Actions assert a cause of action for aiding and abetting certain alleged breaches of fiduciary duty under Florida law against HLSS and others, and claims that HLSS (i) substantially assisted Ocwen’s alleged wrongful conduct by purchasing Ocwen’s mortgage servicing rights and (ii) received improper benefits as a result of its business dealings with Ocwen due to Mr. Erbey’s purported control over both HLSS and Ocwen. Additionally, the Sokolowski Action asserts a cause of action for unjust enrichment against HLSS and others. The Company intends to vigorously defend the Ocwen Derivative Actions. On March 11, 2015, plaintiff David Rattner filed a shareholder derivative action purportedly on behalf of the Company entitled Rattner v. Van Vlack, et al. , No. 2015CA002833 (Fla. Palm Beach Cty. Ct.) (the “HLSS Derivative Action”). The lawsuit names as defendants HLSS directors John P. Van Vlack, Robert J. McGinnis, Kerry Kennedy, Richard J. Lochrie, and David B. Reiner (collectively, the “Director Defendants”), New Residential Investment Corp., and Hexagon Merger Sub, Ltd. The HLSS Derivative Action alleges that the Director Defendants breached their fiduciary duties of due care, diligence, loyalty, honesty and good faith and the duty to act in the best interests of the Company under Cayman law and claims that the Director Defendants approved a proposed merger with New Residential Investment Corp. that (i) provided inadequate consideration to the Company’s shareholders, (ii) included unfair deal protection devices, (iii) and was the result of an inadequate process due to conflicts of interest. On July 8, 2015, the complaint was voluntarily dismissed without prejudice. On May 22, 2015, plaintiff Chester County Employees’ Retirement Fund filed an action in the Court of Chancery in Delaware bringing individual, class and derivative claims purportedly on behalf of NRZ naming as defendants HLSS, NRZ, FIG LLC, Fortress Investment Group LLC and certain directors of NRZ, entitled Chester Cnty. Emp. Ret. Fund v. New Residential Inv. Corp. , No. 11058 (Del. Ch.) (the “Chester County Action”). On July 13, 2015, HLSS filed its motion to dismiss the complaint. The Chester County Action seeks monetary, equitable and declaratory relief against HLSS and certain defendants based on alleged violations of the NYSE Listed Company Manual and the interpretation of certain transaction documents, and claims, among other things, that the defendants deprived plaintiff and the class of a vote on the issuance of stock to HLSS and options to FIG LLC in NRZ’s acquisition of HLSS. HLSS intends to vigorously defend the Chester County Action. The Company has not accrued losses in connection with the above legal contingencies because management does not believe there is probable and reasonably estimable loss. Regulatory Matters On September 15, 2014, the Company received a subpoena from the SEC requesting that it provide certain information related to the Company’s prior accounting conventions for and valuations of our Notes receivable – Rights to MSRs that resulted in the restatement of our consolidated financial statements for the years ended December 31, 2013 and 2012 and for the quarter ended March 31, 2014 during August 2014. On December 22, 2014, the Company received a subpoena from the SEC requesting that it provide information related to certain governance documents and transactions and certain communications regarding the same. The Company is cooperating with the SEC in these matters. On March 23, 2015, the Company received a subpoena from the SEC requesting that it provide information concerning communications between the Company and certain investment advisors and hedge funds. The SEC also requested documents relating to the Company’s structure, certain governance documents and any investigations or complaints connected to trading in the Company’s securities. The Company is cooperating with the SEC in this matter. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS We have evaluated events occurring subsequent to June 30, 2015 and have determined that no subsequent events require disclosure in the notes to the financial statements. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates We prepared the accompanying unaudited Interim Condensed Consolidated Financial Statements in conformity with the instructions of the Securities and Exchange Commission (“SEC”) to Form 10-Q for interim financial statements. In our opinion, the accompanying unaudited financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Material estimates that are particularly significant relate to our fair value measurements of Notes receivable – Rights to MSRs. Certain disclosures included in the Company’s Annual Report are not required to be included on an interim basis in the Company’s Quarterly Reports on Forms 10-Q. The Company has condensed or omitted these disclosures. Therefore, this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , which was filed with the SEC on April 6, 2015 (the "2014 Form 10-K"). |
Basis of Accounting | Going-Concern Basis of Accounting – Periods Prior to April 6, 2015 The Interim Condensed Consolidated Financial Statements for the quarter-to-date and year-to-date periods ended April 5, 2015, as of December 31, 2014 and for the three and six months ended June 30, 2014 were prepared on the going-concern basis of accounting, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Prior period financial statements have not been restated under the liquidation basis of accounting. Liquidation Basis of Accounting – Periods Beginning on and Subsequent to April 6, 2015 On April 6, 2015, the Company adopted the Liquidation Plan; therefore, the Company has applied the liquidation basis of accounting on a prospective basis from the date of adoption of the Liquidation Plan in accordance with GAAP. The liquidation basis of accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the plan of liquidation and requires management to make estimates that affect the amounts reported in the financial statements and the related notes. To the extent there are any changes in the Company’s initial estimates, there will be changes reflected in the Interim Condensed Statement of Changes in Net Assets (Liquidation Basis). As cash is received or paid, consistent with the Company’s initial estimates, there will be no change to the Net assets. Results could differ from these estimates and may affect the net assets in liquidation and actual cash flows. Effective April 6, 2015, the Company adopted the provisions of Accounting Standards Update ("ASU") 2013-07, which clarifies when an entity should apply the liquidation basis of accounting. In addition, the ASU provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. In accordance with the liquidation basis of accounting, the Company has accrued anticipated income and expense through the wind-down period. |
Principles of Consolidation | Principles of Consolidation Our financial statements prior to April 6, 2015 include the accounts of Home Loan Servicing Solutions, Ltd. and its former wholly owned subsidiaries as well as four variable interest entities (“VIE”) of which we were the primary beneficiary. We eliminated intercompany accounts and transactions in consolidation. Upon the consummation of the Asset Sale, the Company divested of all of its former wholly owned subsidiaries, including the VIEs. Accordingly, the financial statements beginning on and subsequent to April 6, 2015 include only the accounts of Home Loan Servicing Solutions, Ltd. We evaluated each special purpose entity (“SPE”) for classification as a VIE. When a SPE met the definition of a VIE and we determined that HLSS was the primary beneficiary, we included the SPE in our Interim Condensed Consolidated Financial Statements. Our Match funded advances were in two SPEs along with related Match funded liabilities (the "Match Funded Advance SPEs"). We determined that these SPEs were VIEs of which we were the primary beneficiaries. The accounts of these SPEs were included in our Interim Condensed Consolidated Financial Statements. Match funded advances on loans serviced for others resulted from our transfers of residential loan servicing advances to SPEs in exchange for cash. The SPEs issued debt supported by collections on the transferred advances. We made these transfers under the terms of our advance facility agreements. These transfers did not qualify for sale accounting because we retained control over the transferred assets. As a result, we accounted for these transfers as financings and classified the transferred advances on our Interim Condensed Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities. We used collections on the Match funded advances pledged to the SPEs to repay principal and to pay interest and the expenses of the SPEs. Holders of the debt issued by the SPEs could look only to the assets of the entity itself for satisfaction of the debt and had no recourse against HLSS. As of December 31, 2014, our Loans held for investment were in two SPEs along with the related Other borrowings (the "Mortgage Loans SPEs"). We determined that these SPEs were VIEs of which we were the primary beneficiaries. The accounts of these SPEs were included in our Interim Condensed Consolidated Financial Statements. (See discussion of the reclassification of our loans to held for sale below.) Our whole loans were transferred to SPEs in exchange for cash, and the SPEs issued debt collateralized by these loans. These transfers did not qualify for sale accounting because we retained control over the transferred assets. As a result, we accounted for these transfers as financings and classified the transferred loans on our Interim Condensed Consolidated Balance Sheet at December 31, 2014 as Loans held for investment and the related liabilities as Other borrowings. We used collections on our whole loans pledged to the SPEs to repay principal and to pay interest and the expenses of the SPEs. Holders of the debt issued by the SPEs could look beyond the assets of the SPEs for satisfaction of the debt and therefore had recourse against HLSS. It was our expectation that the cash flows of the SPEs would be sufficient to meet all claims of the debt holders. HLSS was responsible for making any principal or interest payments to the debt holders not covered by the cash flows of the SPEs. |
Loans Held for Sale | Loans Held for Sale Effective March 31, 2015, we reclassified our Loans held for investment to Loans held for sale based on a change in management’s intention and a decision to actively market the Government National Mortgage Association (“GNMA”) early buy-out (“EBO”) loans for sale. Loans held for sale were reported at the lower of cost or fair value. As of December 31, 2014, both the portfolio of re-performing loans (“RPLs”) and GNMA EBO loans were classified as Loans held for investment based on management’s intent to hold these loans for investment. As further discussed below, we sold our RPL portfolios during the first quarter of 2015. The Company evaluated purchased loans that were not deemed impaired upon acquisition in accordance with the provisions of Accounting Standards Codification ("ASC") 310-20, Receivables - Nonrefundable Fees and Other Costs. Only our GNMA EBO loans were accounted for under ASC 310-20; therefore, interest income was accrued at the amount that we were guaranteed to receive under either the related purchase agreement or by the Federal Housing Administration ("FHA"), which was the amount of interest we ultimately expected to receive. In connection with the reclassification of the GNMA EBO loans to held for sale, we recorded a valuation allowance of $7,654 to record the loans at the lower of cost or fair value. Fair value was determined by reference to counterparty quotations. Effective December 31, 2014, we adopted the provisions of ASU 2014-04. This ASU requires that when an in substance repossession or foreclosure occurs; that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. This amendment did not have a material impact on our Interim Condensed Consolidated Financial Statements. Effective December 31, 2014, we adopted the provisions of ASU 2014-14. Therefore, upon foreclosure of GNMA EBO loans for which we have made or intend to make a claim on the FHA guarantee, we reclassify the carrying amount of the loan to Claims receivable from FHA, which is recorded within Other assets on our Interim Condensed Consolidated Balance Sheets. As a result of our adoption of this ASU, we classified foreclosed properties and outstanding FHA claims as Claims receivable from FHA within our Other assets. See Note 6 for further information. On February 20, 2015, we sold our RPL portfolio to an unrelated third party purchaser for a total purchase price of $337.6 million , subject to a 5% holdback pending completion of the purchaser's due diligence. A portion of the sale proceeds were used to terminate a facility to partially finance our RPLs (the "RPL Facility"). We recognized an immaterial gain on this sale. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . This ASU eliminates the concept of an extraordinary item from GAAP. To be considered an extraordinary item under existing GAAP, an event or transaction must be unusual in nature and must occur infrequently. As a result, an entity will no longer (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; and (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, the ASU does not affect the reporting and disclosure requirements for an event that is unusual in nature or that occurs infrequently. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods, any may be applied prospectively or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted if the guidance is applied as of the beginning of the annual period of adoption. The adoption of ASU 2015-01 is not expected to have a material impact on the Company’s financial statements. ASU 2015-02, Amendments to the Consolidation Analysis . This ASU is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU focuses on the consolidation evaluation for reporting organizations (public and private companies and not-for-profit organizations) that are required to evaluate whether they should consolidate certain legal entities. In addition to reducing the number of consolidation models from four to two, the ASU places more emphasis on risk of loss when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in certain circumstances based solely on its fee arrangement, when certain criteria are met, reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a VIE, changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or VIEs. The ASU will be effective for periods beginning after December 15, 2015, and early adoption is permitted, including adoption in an interim period. The adoption of this ASU is not expected to have a material impact on the Company’s financial statements. ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs . To simplify presentation of debt issuance costs, the amendments in this ASU will require that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of related debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by these amendments. This ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods, and early adoption is permitted. Had the Company adopted the provisions of this ASU, the impact to the Interim Condensed Statement of Net Assets would have been immaterial, and the impact to the Interim Condensed Consolidated Balance Sheet as of December 31, 2014 would have been to reduce Other assets and Total assets each by $16,706 , to reduce Match funded liabilities by $11,534 , to reduce Other borrowings by $5,172 and to reduce Total liabilities by $16,706 . |
Organization; Asset Sale; Dis32
Organization; Asset Sale; Discontinued Operations; Related Parties; Other Recent Developments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table presents the components of the Loss on disposal of discontinued operations included in the Condensed Statement of Changes of Net Assets for the period from April 6, 2015 to June 30, 2015: Assets Cash and cash equivalents $ 48,755 Match funded advances 5,587,720 Notes receivable – Rights to MSRs 593,288 Loans held for sale 417,574 Related party receivables 162,831 Deferred tax assets 996 Other assets 386,393 7,197,557 Liabilities Match funded liabilities 5,193,119 Other borrowings 510,045 Dividends payable 12,783 Income taxes payable 146 Deferred tax liabilities 184 Related party payables 15,595 Other liabilities 18,948 5,750,820 Net assets in disposal group 1,446,737 Consideration received Cash 994,374 NRZ common stock Number of shares 28,286,980 Price per share 15.28 Value of NRZ common stock consideration 432,225 Less: Brokerage and other costs on sale of NRZ common stock (9,476 ) Total consideration received 1,417,123 Loss on disposal of discontinued operations $ 29,614 Net income from discontinued operations reported in the Interim Condensed Consolidated Statements of Operations consisted of the following components for the periods indicated: For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Revenue Interest income – notes receivable – Rights to MSRs $ 5,362 $ 86,574 $ 76,568 $ 189,112 Interest income – other 542 7,777 9,994 10,721 Total interest income 5,904 94,351 86,562 199,833 Related party revenue 4 773 54 1,401 Other revenue 3 — 1,443 — Total revenue 5,911 95,124 88,059 201,234 Operating expenses Compensation and benefits 137 1,694 2,000 3,163 Related party expenses — 496 76 868 General and administrative expenses 915 1,554 8,432 3,359 Total operating expenses 1,052 3,744 10,508 7,390 Other expenses Interest expense 3,018 40,001 43,831 77,512 Loss on termination of interest rate swaps 440 — 440 — Loss on Loans held for sale — — 7,654 — Total other expenses 3,458 40,001 51,925 77,512 Income tax expense 6 — 11 — Net income from discontinued operations $ 1,395 $ 51,379 $ 25,615 $ 116,332 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Assets and Liabilities of SPEs | The following tables summarize the assets and liabilities of our consolidated SPEs at December 31, 2014: At December 31, 2014 Match Funded Advance SPEs Mortgage Loans SPEs Total Match funded advances $ 6,121,595 $ — $ 6,121,595 Loans held for investment — 815,663 815,663 Related party receivables (1) — 3,885 3,885 Other assets (2) 134,955 139,114 274,069 Total assets $ 6,256,550 $ 958,662 $ 7,215,212 Match funded liabilities $ 5,624,088 $ — $ 5,624,088 Other borrowings (3) — 815,986 815,986 Related party payables 5,285 794 6,079 Other liabilities 4,951 4,308 9,259 Total liabilities $ 5,634,324 $ 821,088 $ 6,455,412 (1) Related party receivables principally included Match funded advance collections that were in-transit to pay down our Match funded liabilities as of each presented period. See Note 17 for more information about our Related party receivables. (2) Other assets principally included debt service accounts, claims receivable from the FHA and debt issuance costs. See Note 6 for more information about our Other assets. (3) Other borrowings included the carrying value of our borrowings to acquire Loans held for investment. See Note 8 for more information about our Other borrowings. |
Asset Acquisitions (Tables)
Asset Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Summary Of Loans Held For Investment Acquired | The following table summarizes the purcha se price of assets we acquired during the six months ended June 30, 2014 and reconciles the cash used to acquire such assets: GNMA EBO loans purchase price (1) $ 556,618 RPL purchase price (1) 276,248 Total cash required $ 832,866 Sources: Cash on hand $ 141,214 Other borrowings 691,652 Total cash used $ 832,866 (1) The cash used to purchase these assets is shown within “Purchase of loans held for investment” of the 2014 Interim Condensed Consolidated Statement of Cash Flows. |
Fair Value of Financial Instr35
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets Measured on Recurring Basis | The following tables present assets by level within the fair value hierarchy that were measured at fair value on a recurring basis. At December 31, 2014, we had no assets measured at fair value on a non-recurring basis. At December 31, 2014: Fair Value Level 1 Level 2 Level 3 Measured at fair value on a recurring basis: Assets: Notes receivable – Rights to MSRs $ 614,465 $ — $ — $ 614,465 Derivative financial instruments 1,370 — — 1,370 Total assets $ 615,835 $ — $ — $ 615,835 Liabilities: Derivative financial instruments $ 211 $ — $ — $ 211 Total liabilities $ 211 $ — $ — $ 211 |
Fair Value of Liabilities Measured on Recurring Basis | The following tables present assets by level within the fair value hierarchy that were measured at fair value on a recurring basis. At December 31, 2014, we had no assets measured at fair value on a non-recurring basis. At December 31, 2014: Fair Value Level 1 Level 2 Level 3 Measured at fair value on a recurring basis: Assets: Notes receivable – Rights to MSRs $ 614,465 $ — $ — $ 614,465 Derivative financial instruments 1,370 — — 1,370 Total assets $ 615,835 $ — $ — $ 615,835 Liabilities: Derivative financial instruments $ 211 $ — $ — $ 211 Total liabilities $ 211 $ — $ — $ 211 |
Reconciliation of Changes in Fair Value | The following tables present reconciliations of the fair value and changes in fair value of our Level 3 assets and liabilities that we measure at fair value on a recurring basis: For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 Notes receivable – Rights to MSRs Derivative Notes receivable – Rights to MSRs Derivative Beginning balance $ 594,417 $ (1,230 ) $ 637,794 $ 3,079 Purchases and reductions: Purchases — — — — Reductions (1,129 ) — (4,190 ) — (1,129 ) — (4,190 ) — Changes in fair value: Included in net income (1) — (440 ) (4,025 ) — Included in other comprehensive income (2) — — — (1,778 ) — (440 ) (4,025 ) (1,778 ) Transfers in or out of Level 3 — — — — Ending balance $ 593,288 $ (1,670 ) $ 629,579 $ 1,301 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Notes receivable – Rights to MSRs Derivative Notes receivable – Rights to MSRs Derivative Beginning balance $ 614,465 $ 1,159 $ 633,769 $ 3,306 Purchases and reductions: Purchases — — — — Reductions (17,498 ) — (4,190 ) — (17,498 ) — (4,190 ) — Changes in fair value: Included in net income (1) (3,679 ) (440 ) — — Included in other comprehensive income (2) — (2,389 ) — (2,005 ) (3,679 ) (2,829 ) — (2,005 ) Transfers in or out of Level 3 — — — — Ending balance $ 593,288 $ (1,670 ) $ 629,579 $ 1,301 (1) At each reporting date, we determined the fair value of our Notes receivable – Rights to MSRs and adjusted the carrying value to this amount, and these changes in fair value were included in Interest income in the Interim Condensed Consolidated Statements of Operations prior to April 6, 2015. See Note 12 for additional information regarding our Interest income. (2) For the quarter-to-date and year-to-date periods ended April 5, 2015, none of the pre-tax losses were attributable to derivatives still held at the end of the period. For the three and six months ended June 30, 2014, all of the pre-tax gains (losses) were attributable to derivatives still held at the end of the period. |
Effect on Fair Value of Note Receivable - Rights to MSRs | The following table shows the effect on the fair value of the Notes receivable – Rights to MSRs assuming adverse changes to certain key assumptions used in valuing these assets at December 31, 2014 : Discount Rate Prepayment Speeds Delinquency Rates 100 bps adverse change 200 bps adverse change 10% adverse change 20% adverse change 10% adverse change 20% adverse change At December 31, 2014: Notes receivable – Rights to MSRs $ (10,061 ) $ (19,821 ) $ (17,719 ) $ (34,537 ) $ (55,410 ) $ (108,567 ) |
Quantitative Information on Significant Observable Inputs Used for Valuing Note Receivable - Rights to MSRs | The following table provides additional quantitative information on our significant inputs used for valuing our Notes receivable – Rights to MSRs as of December 31, 2014 : Asset Unobservable Input Low High Weighted Average Notes receivable – Rights to MSRs Discount Rate 14 % 22 % 19 % Prepayment Speeds 13 % 29 % 19 % Delinquency Rates 15 % 35 % 25 % |
Carrying Values and Fair Value Estimates of Financial Instruments Not Carried at Fair Value | Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value: December 31, 2014 December 31, 2014 Carrying Value Fair Value Financial assets: Match funded advances $ 6,121,595 $ 6,121,595 Loans held for investment 815,663 822,298 Total financial assets $ 6,937,258 $ 6,943,893 Financial liabilities: Match funded liabilities $ 5,624,088 $ 5,618,263 Other borrowings 1,182,328 1,167,267 Total financial liabilities $ 6,806,416 $ 6,785,530 |
Match Funded Advances (Tables)
Match Funded Advances (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Match Funded Advances on Residential Loans | Match funded advances on residential loans were comprised of the following: December 31, Principal and interest advances $ 2,539,532 Taxes and insurance advances 2,748,700 Corporate advances 833,363 $ 6,121,595 |
Loans Held for Sale (Tables)
Loans Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of loans held for investment | December 31, 2014 Loans held for investment: GNMA EBO loans $ 477,016 RPLs 338,647 Loans held for investment $ 815,663 |
Schedule of changes in the carrying amount of accretable yield | Changes in the carrying amount of the accretable yield for RPL pools were as follows for the periods indicated: Three months ended June 30, 2014 Accretable Yield Carrying Amount Beginning balance $ — $ — Additions 146,885 276,248 Accretable yield adjustments — — Accretion (159 ) 159 Payments and other reductions, net — (569 ) Ending balance $ 146,726 $ 275,838 For the period January 1, 2015 Six months ended June 30, 2014 Accretable Yield Carrying Amount Accretable Yield Carrying Amount Beginning balance $ 168,968 $ 338,647 $ — $ — Additions — — 146,885 276,248 Accretable yield adjustments — — — — Accretion (1,595 ) 1,595 (159 ) 159 Payments and other reductions, net — (3,588 ) — (569 ) Sale of RPL portfolios (167,373 ) (336,654 ) — — Ending balance $ — $ — $ 146,726 $ 275,838 |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other assets consisted of the following at December 31, 2014: December 31, Debt service accounts (1) $ 128,525 Claims receivable from FHA (2) 109,586 Debt issuance costs (3) 16,706 Accrued interest income (4) 22,661 Interest-earning collateral deposits (5) 1,077 Derivative financial instruments (6) 1,370 Other 1,550 $ 281,475 (1) Under our advance funding facilities, we were contractually required to remit collections of Match funded advances to the trustee within two days of receipt. We did not use the collected funds to reduce the related Match funded liabilities until the payment dates specified in the indenture. The balance also included amounts that we set aside to provide for possible shortfalls in the funds available to pay certain expenses and interest. Lastly, this balance included collections on our whole loans, which were used to pay down a portion of our Other borrowings on the first funding date following quarter end. (2) Claims receivable from FHA related to GNMA EBO loans for which foreclosure had been completed and for which we made or intended to make a claim on the FHA guarantee. (3) Debt issuance costs related to Match funded liabilities and Other borrowings. We amortized these costs to the earlier of the scheduled amortization date, contractual maturity date or prepayment date of the debt. (4) Accrued interest income represented interest earned but not yet collected on our whole loans. (5) Interest-earning collateral deposits represented cash collateral held by our counterparty as part of our interest rate swap agreements. (6) See Notes 3 and 11 for more information regarding our use of derivatives. |
Match Funded Liabilities (Table
Match Funded Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Text Block [Abstract] | |
Match Funded Liabilities | Match funded liabilities were comprised of the following at December 31, 2014: Borrowing Type (1) Interest Rate Maturity (2) Amortization Date (2) Unused Borrowing Capacity (3) Balance Outstanding Series 2012 T2 Term Notes 199 – 494 bps Oct. 2045 Oct. 2015 $ — $ 450,000 Series 2013 T1 Term Notes 150 – 323 bps Jan. 2046 Jan. 2016 — 350,000 Series 2013 T1 Term Notes 229 – 446 bps Jan. 2048 Jan. 2018 — 150,000 Series 2013 T2 Term Notes 115 – 239 bps May 2044 May 2015 — 375,000 Series 2013 T3 Term Notes 179 – 313 bps May 2046 May 2017 — 475,000 Series 2013 T5 Term Notes 198 – 331 bps Aug. 2046 Aug. 2016 — 200,000 Series 2013 T7 Term Notes 198 – 302 bps Nov. 2046 Nov. 2016 — 300,000 Series 2014 T1 Term Notes 124 – 229 bps Jan. 2045 Jan. 2015 — 600,000 Series 2014 T2 Term Notes 222 – 311 bps Jan. 2047 Jan. 2017 — 200,000 Series 2014 T3 Term Notes 281 bps Jun. 2048 Jun. 2018 — 363,000 Series 2012 VF 1 Notes 1-Month LIBOR + 110 – 340 bps Aug. 2045 Aug. 2015 143,673 556,327 Series 2012 VF 2 Notes 1-Month LIBOR + 110 – 340 bps Aug. 2045 Aug. 2015 143,673 556,327 Series 2012 VF 3 Notes 1-Month LIBOR + 110 – 340 bps Aug. 2045 Aug. 2015 143,673 556,327 Series 2013 VF 1 Notes 1-Month LIBOR + 150 - 245 bps Feb. 2045 Dec. 2015 57,893 492,107 $ 488,912 $ 5,624,088 (1) Each term note and variable funding note issuance had four classes, an A, B, C, and D class, with the exception of the Series 2014 T3 Term Notes which had only an A and B class. The Series 2014 T3 Class B Term Notes was exchangeable for notes in three separate classes: BX, CX and DX. (2) The amortization date was the date on which the revolving period ended under each advance facility note and repayment of the outstanding balance began if the note was not renewed or extended. The maturity date was the due date for all outstanding balances. After the amortization date, all collections that represented the repayment of Match funded advances pledged to the facilities were applied to reduce the balance of the note outstanding, and any new advances were ineligible to be financed. (3) Our unused borrowing capacity was available to us if we had additional eligible collateral to pledge and met other borrowing conditions. We paid a 0.50% or 0.625% fee on the unused borrowing capacity, which varied by facility. |
Other Borrowings (Tables)
Other Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Other Borrowings | Other borrowings consisted of the following at December 31, 2014: December 31, 2014 Senior secured term loan facility (1) $ 340,636 EBO Facility (2) 544,513 RPL Facility (3) 271,473 Note Facility (4) 25,706 $ 1,182,328 (1) On June 27, 2013, we entered into a $350,000 senior secured term loan facility, which was issued at a discount to par. The senior secured term loan facility had a maturity date of June 27, 2020 and an interest rate of 1-Month LIBOR plus 350 bps, with a 1.00% LIBOR floor . As of December 31, 2014, the interest rate on our senior secured term loan facility was 4.50% . (2) On March 3, 2014, we entered into the EBO Facility to partially finance the purchase of our initial portfolio of GNMA EBO loans at an interest rate of 1-Month LIBOR plus 305 bps. On October 16, 2014, we amended the EBO Facility to increase the maximum principal balance to partially finance the purchase of a second pool of GNMA EBO loans at an interest rate of 1-Month LIBOR plus 180 bps. This facility had a maturity date of May 1, 2015. (3) On June 26, 2014, we entered into the RPL Facility to partially finance the purchase of our RPLs. The facility had a maturity date of June 26, 2014 and an interest rate of 1-Month LIBOR plus 250 bps. We repaid the RPL Facility in full on February 20, 2015 in conjunction with the sale of our RPL portfolios. (4) On June 24, 2014, we entered into the Note Facility to partially finance the purchase of $37,000 of notes retained as part of the Series 2014 T3 Term Note issuance on June 18, 2014 . The Note Facility matured quarterly and had an interest rate of 1-Month LIBOR plus 115 bps. |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Per Share Earnings | The following tables reconcile the numerators and denominators of the basic and diluted EPS for the periods indicated: (In thousands, except per share data) For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 Net Income Shares Earnings Per Share Amount Net Income Shares Earnings Per Share Amount Basic EPS: Net (loss) income available to common shareholders $ 1,198 71,016,771 $ 50,660 71,016,771 Less: Net income allocated to participating securities (7 ) — — — Adjusted net income available to common shareholders 1,191 71,016,771 $ 0.02 50,660 71,016,771 $ 0.71 Dilutive Securities: Plus: Net income allocated to participating securities 7 — — — Less: Net income re-allocated to participating securities (7 ) — — — Incremental ordinary shares deemed outstanding — 12,500 — — Diluted EPS: Income allocated to common shares and assumed share conversions $ 1,191 71,029,271 $ 0.02 $ 50,660 71,016,771 $ 0.71 (In thousands, except per share data) For the period January 1, 2015 to April 5, 2015 For the six months ended Net Income Shares Earnings Per Share Amount Net Income Shares Earnings Per Share Amount Basic EPS: Net income available to common shareholders $ 16,458 71,016,771 $ 115,020 71,016,771 Less: Net income allocated to participating securities (21 ) — — — Adjusted net income available to common shareholders 16,437 71,016,771 $ 0.23 115,020 71,016,771 $ 1.62 Dilutive Securities: Plus: Net income allocated to participating securities 21 — — — Less: Net income re-allocated to participating securities (21 ) — — — Incremental ordinary shares deemed outstanding — 67,539 — — Diluted EPS: Income allocated to common shares and assumed share conversions $ 16,437 71,084,310 $ 0.23 $ 115,020 71,016,771 $ 1.62 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Stock options excluded from the computation of diluted EPS were as follows for the periods indicated: For the period April 1, 2015 to April 5, 2015 For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Anti-dilutive (1) 37,500 640,000 37,500 640,000 Market-based (2) 50,000 640,000 50,000 640,000 (1) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock. (2) Shares that were issuable upon the achievement of certain performance criteria related to our stock price and an annualized rate of return to investors. Note 14 provides details of our share-based compensation. |
Derivative Financial Instrume42
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swaps | The following tables provide information about our interest rate swaps at December 31, 2014 : Purpose Date Opened Effective Date (1) Maturity We Pay We Receive Balance Sheet Location Notional Amount Fair Value Designated as hedges (2) (3): Hedge the effects of changes in 1-Month LIBOR September 2012 September 2012 August 2017 0.5188 % 1-Month LIBOR Other assets $ 73,888 $ 877 Hedge the effects of changes in 1-Month LIBOR January 2013 January 2016 December 2017 1.3975 % 1-Month LIBOR Other assets 338,009 493 Total asset derivatives designated as hedges as of December 31, 2014 $ 411,897 $ 1,370 Total asset derivatives as of December 31, 2014 $ 411,897 $ 1,370 Purpose Date Opened Effective Date (1) Maturity We Pay We Receive Balance Sheet Location Notional Amount Fair Value Designated as hedges (2) (3): Hedge the effects of changes in 1-Month LIBOR March 2012 March 2012 March 2016 0.6325 % 1-Month LIBOR Other liabilities $ 81,506 $ (209 ) Hedge the effects of changes in 1-Month LIBOR May 2012 May 2012 May 2016 0.6070 % 1-Month LIBOR Other liabilities 17,502 (2 ) Total liability derivatives designated as hedges as of December 31, 2014 $ 99,008 $ (211 ) Total liability derivatives as of December 31, 2014 $ 99,008 $ (211 ) (1) The effective date of the swap was the date from which monthly net settlements began to be computed. (2) Our interest rate swaps were terminated during April 2015 in conjunction with the Asset Sale. The net settlements upon termination were $1,587 payable to the counterparties. (3) There was an unrealized pre-tax loss of $1,778 and $2,005 related to our interest rate swaps included in AOCI for the three and six months ended June 30, 2014 . |
Summarization of Use of Derivative | The following table summarizes our use of derivatives during the periods indicated: For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Notional balance at beginning of period $ 510,905 $ 953,195 Additions — — Maturities — — Terminations (488,813 ) — Amortization (22,092 ) (315,451 ) Notional balance at end of period $ — $ 637,744 |
Interest Income (Tables)
Interest Income (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Receivable - Rights to MSRs | |
Interest and Other Income [Line Items] | |
Calculation of Interest Income on Notes Receivable | The following table shows how we calculated Interest income – notes receivable – Rights to MSRs for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Servicing fees collected $ 12,587 $ 185,690 $ 192,884 $ 374,847 Subservicing fee payable to Ocwen (6,097 ) (90,901 ) (97,039 ) (181,545 ) Net servicing fees retained by HLSS 6,490 94,789 95,845 193,302 Reduction in Notes receivable – Rights to MSRs (1,128 ) (4,190 ) (17,497 ) (4,190 ) Servicing transfers (1) — — 1,899 — Increase (decrease) in the fair value of Notes receivable – Rights to MSRs — (4,025 ) (3,679 ) — $ 5,362 $ 86,574 $ 76,568 $ 189,112 (1) Ocwen was required to reimburse us in the event of a transfer of servicing at predetermined contractual rates. These amounts represented amounts payable by Ocwen related to servicing transfers. |
Interest Income - other | |
Interest and Other Income [Line Items] | |
Calculation of Interest Income on Notes Receivable | The following table shows our Interest income – other for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Continuing operations: Bank account interest (1) $ 1 $ 13 $ 25 $ 30 Discontinued operations: Loan interest (2) 435 5,770 7,843 7,554 Advance financing interest (3) 67 952 1,094 1,154 Bank account interest (4) 40 1,055 1,057 2,013 $ 542 $ 7,777 $ 9,994 $ 10,721 (1) These amounts were included in the Interim Condensed Consolidated Statements of Operations as Interest income – other. (2) Represented interest earned on GNMA EBO loans and the accretion of the accretable yield on our pools of RPLs and was included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A). (3) Represented interest earned on servicing advance financing we provided to Ocwen at a rate of 1-Month LIBOR plus a spread ranging from 450 bps to 550 bps. These amounts were included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A). (4) These amounts were included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A). |
Interest Expense (Tables)
Interest Expense (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Interest Expense [Abstract] | |
Components of Interest Expense | The following table presents the components of Interest expense, which is included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations (see Note 1A), for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Match funded liabilities $ 2,266 $ 27,126 $ 29,547 $ 53,956 Other borrowings 543 7,961 9,530 13,284 Amortization of debt issuance costs 209 4,598 4,587 9,560 Interest rate swaps — 316 167 712 $ 3,018 $ 40,001 $ 43,831 $ 77,512 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | A summary of option activity under the Plan for the year-to-date period ended April 5, 2015 is presented below. Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2014 1,280,000 $ 22.51 9.1 $ — Granted — — Exercised — — Forfeited or expired (1,280,000 ) 22.51 Outstanding at April 5, 2015 — $ — 0.0 $ — Exercisable at April 5, 2015 — $ — 0.0 $ — (1) Intrinsic value represents the difference between the Company’s closing stock price and the exercise price multiplied by the number of options outstanding and exercisable at a price below that closing price. |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the Service-Based Options was determined using the Black-Scholes option pricing model, and a lattice (binomial) model was used to determine the fair value of the Market-Based Options using the following assumptions as of the grant date for the six months ended June 30, 2014: For the six months ended June 30, 2014 Black-Scholes Binomial Risk-free interest rate 2.13 % 0.13% - 3.23% Expected stock price volatility 19.62 % 19.62 % Expected dividend yield 7.82 % 7.82 % Expected option life (in years) 6.5 2.7 - 3.5 Contractual life (in years) 10 10 Fair Value $0.87 - $1.27 $0.53 - $1.43 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Transactions with Ocwen under Purchase Agreement | The following table summarizes our transactions with Ocwen related to our Notes receivable – Rights to MSRs for the periods indicated: For the period For the three months ended June 30, 2014 For the period January 1, 2015 to April 5, 2015 For the six months ended June 30, 2014 Servicing fees collected $ 12,587 $ 185,690 $ 192,884 $ 374,847 Subservicing fee payable to Ocwen (6,097 ) (90,901 ) (97,039 ) (181,545 ) Net servicing fees retained by HLSS (1) 6,490 94,789 95,845 193,302 Servicing advances purchased from Ocwen in the ordinary course of prior business activities $ 55,378 $ 3,368,379 $ 3,556,561 $ 6,871,754 (1) Net servicing fees retained by HLSS were included in the Interim Condensed Consolidated Statements of Operations as a component of Net income from discontinued operations. See Note 12 for additional information regarding our Interest income. |
Receivable from and Payable to Related Parties | The following table summarizes amounts receivable from and payable to related parties at December 31, 2014: December 31, 2014 Servicing advance financing receivables (1) $ 84,107 Servicing fees collected (2) 5,686 Professional services (3) 33 Loan collections in transit (4) 3,885 Other 690 Receivables from Ocwen $ 94,401 Subservicing fees payable (5) $ 7,999 Advance purchases (6) 5,285 Other 1,133 Payables to Ocwen $ 14,417 Payables to Altisource $ 86 (1) We provided financing to Ocwen for servicing advances. We received interest income at a rate of 1-Month LIBOR plus a spread ranging from 450 bps to 550 bps. (2) Ocwen was required to remit to us servicing fees it collected on our behalf within two business days. The amount due from Ocwen represents servicing fees collected but not remitted at the end of the month. (3) Represented the amount due for professional services provided that were outstanding as of the end of the period. (4) Upon collection, Ocwen was contractually obligated to remit collections of our Loans held for sale or Loans held for investment to a custodial account. This receivable represents the portion of these collections that were not yet deposited into the custodial account. (5) The base fee and performance fee, if any, that comprised the subservicing fees payable were calculated and paid to Ocwen within three business days following the end of the month. (6) We were contractually obligated to reimburse advances made by Ocwen. This payable represents the portion of advance payments that were due to Ocwen on advances made by them. |
Organization; Asset Sale; Dis47
Organization; Asset Sale; Discontinued Operations; Related Parties; Other Recent Developments - Asset Sale (Details) - USD ($) | Apr. 06, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Common stock, Par value (usd per share) | $ 0.01 | $ 0.01 | |
Potential cash distribution if merger is not consummated, liabilities and expenses | $ 50,000,000 | ||
Right to receive amount, cash (usd per share) | $ 0.704059 | ||
Asset Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash received for sale of assets | $ 1,000,000,000 | ||
Shares issued for assets | 28,286,980 | ||
Net proceeds from asset sale of stock | $ 422,749,000 | ||
New Residential Investment Corp. | Asset Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Common stock, Par value (usd per share) | $ 0.01 | ||
Merger Agreement | New Residential Investment Corp. | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Common stock, Par value (usd per share) | $ 0.01 | ||
Merger consummation period | 9 months |
Organization; Asset Sale; Dis48
Organization; Asset Sale; Discontinued Operations; Related Parties; Other Recent Developments - Loss on Disposal of Discontinued Operations Included in the Condensed Statement of Changes of Net Assets (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 06, 2015 | Jun. 30, 2015 | Apr. 05, 2015 |
Asset Sale | |||
Liabilities | |||
Cash received for sale of assets | $ 1,000,000 | ||
Consideration received, shares | 28,286,980 | ||
Discontinued Operations, Disposed of by Sale | |||
Liabilities | |||
Loss on disposal of discontinued operations | $ 29,614 | ||
Discontinued Operations, Disposed of by Sale | Asset Sale | |||
Assets | |||
Cash and cash equivalents | $ 48,755 | ||
Match funded advances | 5,587,720 | ||
Notes receivable – Rights to MSRs | 593,288 | ||
Loans held for sale | 417,574 | ||
Related party receivables | 162,831 | ||
Deferred tax assets | 996 | ||
Other assets | 386,393 | ||
Total Assets | 7,197,557 | ||
Liabilities | |||
Match funded liabilities | 5,193,119 | ||
Other borrowings | 510,045 | ||
Dividends payable | 12,783 | ||
Income taxes payable | 146 | ||
Deferred tax liabilities | 184 | ||
Related party payables | 15,595 | ||
Other liabilities | 18,948 | ||
Total liabilities | 5,750,820 | ||
Net assets in disposal group | $ 1,446,737 | ||
Cash received for sale of assets | $ 994,374 | ||
Consideration received, shares | 28,286,980 | ||
Consideration received, price per share (usd per share) | $ 15.28 | ||
Consideration received, Value of common stock | $ 432,225 | ||
Consideration received, less: brokerage and other costs on sale of stock | (9,476) | ||
Total consideration received | $ 1,417,123 |
Organization; Asset Sale; Dis49
Organization; Asset Sale; Discontinued Operations; Related Parties; Other Recent Developments - Net (Loss) Income from Discontinued Operations Reported in the Interim Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income tax expense | $ 6 | $ 11 | $ 0 | $ 0 |
Net income from discontinued operations | 1,395 | 25,615 | 51,379 | 116,332 |
Asset Sale | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Interest income – notes receivable – Rights to MSRs | 5,362 | 76,568 | 86,574 | 189,112 |
Interest income – other | 542 | 9,994 | 7,777 | 10,721 |
Total interest income | 5,904 | 86,562 | 94,351 | 199,833 |
Related party revenue | 4 | 54 | 773 | 1,401 |
Other revenue | 3 | 1,443 | 0 | 0 |
Total revenue | 5,911 | 88,059 | 95,124 | 201,234 |
Compensation and benefits | 137 | 2,000 | 1,694 | 3,163 |
Related party expenses | 0 | 76 | 496 | 868 |
General and administrative expenses | 915 | 8,432 | 1,554 | 3,359 |
Total operating expenses | 1,052 | 10,508 | 3,744 | 7,390 |
Interest expense | 3,018 | 43,831 | 40,001 | 77,512 |
Loss on termination of interest rate swaps | 440 | 440 | 0 | 0 |
Loss on Loans held for sale | 0 | 7,654 | 0 | 0 |
Total other expenses | 3,458 | 51,925 | 40,001 | 77,512 |
Income tax expense | 6 | 11 | 0 | 0 |
Net income from discontinued operations | $ 1,395 | $ 25,615 | $ 51,379 | $ 116,332 |
Organization; Asset Sale; Dis50
Organization; Asset Sale; Discontinued Operations; Related Parties; Other Recent Developments - Other Recent Developments (Details) - USD ($) | Apr. 27, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Apr. 06, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Dividends paid, cash | $ 1,200,000,000 | $ 38,349,000 | $ 65,336,000 | |
Cash dividend per share (usd per share) | $ 16.613 | |||
Potential cash distribution if merger is not consummated, liabilities and expenses | $ 50,000,000 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | Feb. 20, 2015USD ($) | Apr. 05, 2015USD ($) | Jun. 30, 2015USD ($)special_purpose_entityEntity | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($)special_purpose_entity |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of variable interest entities which company is the primary beneficiary | Entity | 4 | ||||
Number of match funded advances in SPEs | special_purpose_entity | 2 | ||||
Number of loans held for investment in SPEs | special_purpose_entity | 2 | ||||
Decrease in fair value | $ 7,654 | $ 7,654 | |||
Proceeds from the sale of RPL portfolios | $ 337,553 | $ 0 | |||
RPLs | Unrelated Third Party | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Proceeds from the sale of RPL portfolios | $ 337,600 | ||||
Holdback percent on sale of RPL portfolio | 5.00% | ||||
Liquidation Basis of Accounting | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Estimated income expected to be earned during liquidation | 17 | ||||
Compensation and benefits | 176 | ||||
Legal and professional fees | 255 | ||||
Costs and Expenses | $ 29 | ||||
ASU 2015-03 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Effect of ASU if early adopted, Reduction to Other assets | $ 16,706 | ||||
Effect of ASU if early adopted, Reduction to Total assets | 16,706 | ||||
Effect of ASU if early adopted, Reduction to Match funded liabilities | 11,534 | ||||
Effect of ASU if early adopted, Reduction to Other borrowings | 5,172 | ||||
Effect of ASU if early adopted, Reduction to Total liabilities | $ 16,706 |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Summary of Assets and Liabilities of SPEs (Detail) $ in Thousands | Dec. 31, 2014USD ($) |
Financial Assets and Liabilities [Line Items] | |
Match funded advances | $ 6,121,595 |
Loans held for investment | 815,663 |
Related party receivables | 94,401 |
Other assets | 281,475 |
Total assets | 8,138,099 |
Match funded liabilities | 5,624,088 |
Other borrowings | 1,182,328 |
Related party payables | 14,503 |
Other liabilities | 12,454 |
Total liabilities | 6,846,820 |
Variable Interest Entity | |
Financial Assets and Liabilities [Line Items] | |
Match funded advances | 6,121,595 |
Loans held for investment | 815,663 |
Related party receivables | 3,885 |
Other assets | 274,069 |
Total assets | 7,215,212 |
Match funded liabilities | 5,624,088 |
Other borrowings | 815,986 |
Related party payables | 6,079 |
Other liabilities | 9,259 |
Total liabilities | 6,455,412 |
Match Funded Advance SPEs | Variable Interest Entity | |
Financial Assets and Liabilities [Line Items] | |
Match funded advances | 6,121,595 |
Loans held for investment | 0 |
Related party receivables | 0 |
Other assets | 134,955 |
Total assets | 6,256,550 |
Match funded liabilities | 5,624,088 |
Other borrowings | 0 |
Related party payables | 5,285 |
Other liabilities | 4,951 |
Total liabilities | 5,634,324 |
Mortgage Loans SPEs | Variable Interest Entity | |
Financial Assets and Liabilities [Line Items] | |
Match funded advances | 0 |
Loans held for investment | 815,663 |
Related party receivables | 3,885 |
Other assets | 139,114 |
Total assets | 958,662 |
Match funded liabilities | 0 |
Other borrowings | 815,986 |
Related party payables | 794 |
Other liabilities | 4,308 |
Total liabilities | $ 821,088 |
Asset Acquisitions - Additional
Asset Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Apr. 05, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 27, 2014 | Mar. 31, 2014 | Mar. 03, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||||
RPL purchase price | $ 0 | $ 338,647 | $ 275,838 | $ 0 | $ 0 | ||
GMNA EBO | Ocwen | Affiliated Entity | |||||||
Business Acquisition [Line Items] | |||||||
EBO loans unpaid principal balance | $ 549,411 | ||||||
GNMA EBO loans purchase price | $ 556,618 | ||||||
RPLs | Unrelated Third Party | |||||||
Business Acquisition [Line Items] | |||||||
Outstanding balance of RPLs | $ 396,939 | ||||||
RPL purchase discount rate | 30.00% | ||||||
RPL purchase price | $ 276,248 |
Asset Acquisitions - Summary of
Asset Acquisitions - Summary of Purchase Price of Assets and Liabilities (Detail) $ in Thousands | Jun. 30, 2014USD ($) |
Business Acquisition [Line Items] | |
Total cash required | $ 832,866 |
Affiliated Entity | Ocwen | |
Business Acquisition [Line Items] | |
Cash on hand | 141,214 |
Other borrowings | 691,652 |
Total cash used | 832,866 |
GMNA EBO | Affiliated Entity | Ocwen | |
Business Acquisition [Line Items] | |
GNMA EBO loans purchase price | 556,618 |
RPLs | Unrelated Third Party | |
Business Acquisition [Line Items] | |
GNMA EBO loans purchase price | $ 276,248 |
Fair Value of Financial Instr55
Fair Value of Financial Instruments - Fair Value and Changes in Assets and Liabilities Measured on Recurring and Non-recurring Basis (Detail) $ in Thousands | Dec. 31, 2014USD ($) |
Financial assets: | |
Derivative financial instruments | $ 1,370 |
Recurring, Fair Value | |
Financial assets: | |
Notes receivable - Rights to MSRs | 614,465 |
Derivative financial instruments | 1,370 |
Total financial assets | 615,835 |
Financial liabilities: | |
Derivative financial instruments | 211 |
Total financial liabilities | 211 |
Recurring, Fair Value | Level 3 | |
Financial assets: | |
Notes receivable - Rights to MSRs | 614,465 |
Derivative financial instruments | 1,370 |
Total financial assets | 615,835 |
Financial liabilities: | |
Derivative financial instruments | 211 |
Total financial liabilities | $ 211 |
Fair Value of Financial Instr56
Fair Value of Financial Instruments - Reconciliation of Changes in Fair Value (Detail) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Changes in fair value : | ||||
Included in net income | $ 0 | |||
Notes Receivable - Rights to MSRs | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | $ 594,417 | $ 614,465 | 637,794 | $ 633,769 |
Purchases and reductions: | ||||
Purchases | 0 | 0 | 0 | 0 |
Reductions | (1,129) | (17,498) | (4,190) | (4,190) |
Total | (1,129) | (17,498) | (4,190) | (4,190) |
Changes in fair value : | ||||
Included in net income | 0 | (3,679) | (4,025) | 0 |
Total | 0 | (3,679) | (4,025) | 0 |
Transfers in or out of Level 3 | 0 | 0 | 0 | 0 |
Ending balance | 593,288 | 593,288 | 629,579 | 629,579 |
Derivative Financial Instruments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | (1,230) | 1,159 | 3,079 | 3,306 |
Changes in fair value : | ||||
Included in net income | (440) | (440) | 0 | |
Included in other comprehensive income | 0 | (2,389) | (1,778) | (2,005) |
Total | (440) | (2,829) | (1,778) | (2,005) |
Transfers in or out of Level 3 | 0 | 0 | 0 | 0 |
Ending balance | $ (1,670) | $ (1,670) | $ 1,301 | $ 1,301 |
Fair Value of Financial Instr57
Fair Value of Financial Instruments - Effect on Fair Value of Note Receivable - Rights to MSRs (Detail) - Notes Receivable - Rights to MSRs $ in Thousands | Dec. 31, 2014USD ($) |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount Rate 100 bps adverse change | $ (10,061) |
Discount Rate 200 bps adverse change | (19,821) |
Prepayment Speeds 10% adverse change | (17,719) |
Prepayment Speeds 20% adverse change | (34,537) |
Delinquency Rates 10% adverse change | (55,410) |
Delinquency Rates 20% adverse change | $ (108,567) |
Fair Value of Financial Instr58
Fair Value of Financial Instruments - Quantitative Information on Significant Observable Inputs Used for Valuing Note Receivable - Rights to MSRs (Detail) - Notes Receivable - Rights to MSRs | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Weighted Average - Discount Rate | 19.00% |
Weighted Average - Prepayment Speeds | 19.00% |
Weighted Average - Delinquency Rates | 25.00% |
Low | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount Rate | 14.00% |
Prepayment Speeds | 13.00% |
Delinquency Rates | 15.00% |
High | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount Rate | 22.00% |
Prepayment Speeds | 29.00% |
Delinquency Rates | 35.00% |
Fair Value of Financial Instr59
Fair Value of Financial Instruments - Carrying Values and Fair Value Estimates of Financial Instruments Not Carried at Fair Value (Detail) $ in Thousands | Dec. 31, 2014USD ($) |
Financial assets: | |
Match funded advances | $ 6,121,595 |
Loans held for investment | 815,663 |
Financial liabilities: | |
Match funded liabilities | 5,624,088 |
Other borrowings | 1,182,328 |
Carrying Value | |
Financial assets: | |
Match funded advances | 6,121,595 |
Loans held for investment | 815,663 |
Total financial assets | 6,937,258 |
Financial liabilities: | |
Match funded liabilities | 5,624,088 |
Other borrowings | 1,182,328 |
Total financial liabilities | 6,806,416 |
Fair Value | |
Financial assets: | |
Match funded advances | 6,121,595 |
Loans held for investment | 822,298 |
Total financial assets | 6,943,893 |
Financial liabilities: | |
Match funded liabilities | 5,618,263 |
Other borrowings | 1,167,267 |
Total financial liabilities | $ 6,785,530 |
Match Funded Advances - Residen
Match Funded Advances - Residential Loans (Detail) $ in Thousands | Dec. 31, 2014USD ($) |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | |
Match funded advances | $ 6,121,595 |
Variable Interest Entity | |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | |
Principal and interest advances | 2,539,532 |
Taxes and insurance advances | 2,748,700 |
Corporate advances | 833,363 |
Match funded advances | $ 6,121,595 |
Loans Held for Sale - Additiona
Loans Held for Sale - Additional Information (Details) - USD ($) $ in Thousands | Feb. 20, 2015 | Apr. 05, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Jun. 27, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for investment | $ 815,663 | |||||
Decrease in fair value | $ 7,654 | $ 7,654 | ||||
Contractually required payments receivable | $ 622,100 | |||||
Fair value of RPLs | 276,200 | |||||
Cash flows expected to be collected | $ 423,100 | |||||
Proceeds from the sale of RPL portfolios | $ 337,553 | $ 0 | ||||
GNMA EBO Loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for investment | 477,016 | |||||
RPLs | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for investment | $ 338,647 | |||||
RPLs | Unrelated Third Party | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Proceeds from the sale of RPL portfolios | $ 337,600 | |||||
Holdback percent on sale of RPL portfolio | 5.00% |
Loans Held for Sale - Changes i
Loans Held for Sale - Changes in Carrying Amount of Accretable Yield (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 | Apr. 05, 2015 | Jun. 30, 2014 | |
Accretable Yield | |||||
Beginning balance | $ 168,968 | $ 0 | $ 0 | ||
Additions | 0 | 146,885 | 146,885 | ||
Accretable yield adjustments | 0 | 0 | 0 | ||
Accretion | (1,595) | (159) | (159) | ||
Payments and other reductions, net | 0 | 0 | 0 | ||
Sale of RPL portfolios | (167,373) | 0 | |||
Ending balance | 168,968 | 0 | 0 | $ 0 | $ 146,726 |
Carrying Amount | |||||
Beginning balance | 338,647 | 0 | 0 | ||
Additions | 0 | 276,248 | 276,248 | ||
Accretable yield adjustments | 0 | 0 | 0 | ||
Accretion | 1,595 | 159 | 159 | ||
Payments and other reductions, net | (3,588) | (569) | (569) | ||
Sale of RPL portfolios | (336,654) | 0 | |||
Ending balance | $ 0 | $ 275,838 | $ 275,838 |
Other Assets (Detail)
Other Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Debt service accounts | $ 128,525 | |
Claims receivable from FHA | 109,586 | |
Debt issuance costs | 16,706 | |
Accrued interest income | 22,661 | |
Interest-earning collateral deposits | 1,077 | |
Derivative financial instruments | 1,370 | |
Other | 1,550 | |
Total | $ 281,475 | |
Period to remit collections on pledged advances to the trustee | 2 days |
Match Funded Liabilities (Detai
Match Funded Liabilities (Detail) - Dec. 31, 2014 - USD ($) $ in Thousands | Total |
Debt Instrument [Line Items] | |
Ending Balance | $ 5,624,088 |
Minimum | |
Debt Instrument [Line Items] | |
Percentage of fee on the unused borrowing | 0.50% |
Maximum | |
Debt Instrument [Line Items] | |
Percentage of fee on the unused borrowing | 0.625% |
Variable Interest Entity | |
Debt Instrument [Line Items] | |
Unused borrowing capacity | $ 488,912 |
Ending Balance | $ 5,624,088 |
Variable Interest Entity | Series 2012 T2 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 199 – 494 bps |
Debt instrument, maturity date | Oct. 1, 2045 |
Debt instrument, amortization date | 2015-10 |
Ending Balance | $ 450,000 |
Variable Interest Entity | Series 2012 T2 Term Notes | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 1.99% |
Variable Interest Entity | Series 2012 T2 Term Notes | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 4.94% |
Variable Interest Entity | Series 2013 T1 Term Notes | Group 2 | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 150 – 323 bps |
Debt instrument, maturity date | Jan. 1, 2046 |
Debt instrument, amortization date | 2016-01 |
Ending Balance | $ 350,000 |
Variable Interest Entity | Series 2013 T1 Term Notes | Group 2 | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 1.50% |
Variable Interest Entity | Series 2013 T1 Term Notes | Group 2 | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 3.23% |
Variable Interest Entity | Series 2013 T1 Term Notes | Group 3 | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 229 – 446 bps |
Debt instrument, maturity date | Jan. 1, 2048 |
Debt instrument, amortization date | 2018-01 |
Ending Balance | $ 150,000 |
Variable Interest Entity | Series 2013 T1 Term Notes | Group 3 | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 2.29% |
Variable Interest Entity | Series 2013 T1 Term Notes | Group 3 | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 4.46% |
Variable Interest Entity | Series 2013 T2 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 115 – 239 bps |
Debt instrument, maturity date | May 1, 2044 |
Debt instrument, amortization date | 2015-05 |
Ending Balance | $ 375,000 |
Variable Interest Entity | Series 2013 T2 Term Notes | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 1.15% |
Variable Interest Entity | Series 2013 T2 Term Notes | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 2.39% |
Variable Interest Entity | Series 2013 T3 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 179 – 313 bps |
Debt instrument, maturity date | May 1, 2046 |
Debt instrument, amortization date | 2017-05 |
Ending Balance | $ 475,000 |
Variable Interest Entity | Series 2013 T3 Term Notes | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 1.79% |
Variable Interest Entity | Series 2013 T3 Term Notes | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 3.13% |
Variable Interest Entity | Series 2013 T5 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 198 – 331 bps |
Debt instrument, maturity date | Aug. 1, 2046 |
Debt instrument, amortization date | 2016-08 |
Ending Balance | $ 200,000 |
Variable Interest Entity | Series 2013 T5 Term Notes | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 1.98% |
Variable Interest Entity | Series 2013 T5 Term Notes | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 3.31% |
Variable Interest Entity | Series 2013 T7 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 198 – 302 bps |
Debt instrument, maturity date | Nov. 1, 2046 |
Debt instrument, amortization date | 2016-11 |
Ending Balance | $ 300,000 |
Variable Interest Entity | Series 2013 T7 Term Notes | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 1.98% |
Variable Interest Entity | Series 2013 T7 Term Notes | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 3.02% |
Variable Interest Entity | Series 2014 T1 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 124 – 229 bps |
Debt instrument, maturity date | Jan. 1, 2045 |
Debt instrument, amortization date | 2015-01 |
Ending Balance | $ 600,000 |
Variable Interest Entity | Series 2014 T1 Term Notes | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 1.24% |
Variable Interest Entity | Series 2014 T1 Term Notes | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 2.29% |
Variable Interest Entity | Series 2014 T2 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 222 – 311 bps |
Debt instrument, maturity date | Jan. 1, 2047 |
Debt instrument, amortization date | 2017-01 |
Ending Balance | $ 200,000 |
Variable Interest Entity | Series 2014 T2 Term Notes | Minimum | |
Debt Instrument [Line Items] | |
Interest rate | 2.22% |
Variable Interest Entity | Series 2014 T2 Term Notes | Maximum | |
Debt Instrument [Line Items] | |
Interest rate | 3.11% |
Variable Interest Entity | Series 2014 T3 Term Notes | |
Debt Instrument [Line Items] | |
Interest rate | 2.81% |
Interest rate to calculate the cost of servicing advances | 281 bps |
Debt instrument, maturity date | Jun. 1, 2048 |
Debt instrument, amortization date | 2018-06 |
Ending Balance | $ 363,000 |
Variable Interest Entity | Series 2012 VF 1 Notes | LIBOR | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 1-Month LIBOR + 110 – 340 bps |
Debt instrument, maturity date | Aug. 1, 2045 |
Debt instrument, amortization date | 2015-08 |
Unused borrowing capacity | $ 143,673 |
Ending Balance | $ 556,327 |
Variable Interest Entity | Series 2012 VF 1 Notes | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 1.10% |
Variable Interest Entity | Series 2012 VF 1 Notes | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 3.40% |
Variable Interest Entity | Series 2012 VF 2 Notes | LIBOR | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 1-Month LIBOR + 110 – 340 bps |
Debt instrument, maturity date | Aug. 1, 2045 |
Debt instrument, amortization date | 2015-08 |
Unused borrowing capacity | $ 143,673 |
Ending Balance | $ 556,327 |
Variable Interest Entity | Series 2012 VF 2 Notes | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 1.10% |
Variable Interest Entity | Series 2012 VF 2 Notes | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 3.40% |
Variable Interest Entity | Series 2013 VF 3 Notes | LIBOR | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 1-Month LIBOR + 110 – 340 bps |
Debt instrument, maturity date | Aug. 1, 2045 |
Debt instrument, amortization date | 2015-08 |
Unused borrowing capacity | $ 143,673 |
Ending Balance | $ 556,327 |
Variable Interest Entity | Series 2013 VF 3 Notes | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 1.10% |
Variable Interest Entity | Series 2013 VF 3 Notes | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 3.40% |
Variable Interest Entity | Series 2013 VF 1 Notes | LIBOR | |
Debt Instrument [Line Items] | |
Interest rate to calculate the cost of servicing advances | 1-Month LIBOR + 150 - 245 bps |
Debt instrument, maturity date | Feb. 1, 2045 |
Debt instrument, amortization date | 2015-12 |
Unused borrowing capacity | $ 57,893 |
Ending Balance | $ 492,107 |
Variable Interest Entity | Series 2013 VF 1 Notes | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 1.50% |
Variable Interest Entity | Series 2013 VF 1 Notes | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Percentage added for interest rate | 2.45% |
Other Borrowings (Detail)
Other Borrowings (Detail) - USD ($) | Oct. 16, 2014 | Jun. 26, 2014 | Jun. 24, 2014 | Mar. 03, 2014 | Jun. 27, 2013 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||||
Other borrowings | $ 1,182,328,000 | |||||
Senior Secured Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Other borrowings | $ 340,636,000 | |||||
Debt instrument face amount | $ 350,000,000 | |||||
Debt instrument, maturity date | Jun. 27, 2020 | |||||
Interest rate, description | an interest rate of 1-Month LIBOR plus 350 bps, with a 1.00% LIBOR floor | |||||
Debt instrument, interest rate | 4.50% | |||||
EBO Facility | ||||||
Debt Instrument [Line Items] | ||||||
Other borrowings | $ 544,513,000 | |||||
RPL Facility | ||||||
Debt Instrument [Line Items] | ||||||
Other borrowings | 271,473,000 | |||||
Note Facility | ||||||
Debt Instrument [Line Items] | ||||||
Other borrowings | 25,706,000 | |||||
Interest rate, description | 1-Month LIBOR | |||||
Revolving Credit Facility | EBO Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, description | 1-Month LIBOR | |||||
Revolving Credit Facility | RPL Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, description | 1-Month LIBOR | |||||
Variable Interest Entity | ||||||
Debt Instrument [Line Items] | ||||||
Other borrowings | $ 815,986,000 | |||||
Variable Interest Entity | Series 2014 T3 Term Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 37,000,000 | |||||
Debt instrument, maturity date | Jun. 1, 2048 | |||||
Interest rate, description | 281 bps | |||||
Base Rate | Senior Secured Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Percentage added for interest rate | 3.50% | |||||
LIBOR | Senior Secured Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Floor of LIBOR | 1.00% | |||||
LIBOR | Note Facility | ||||||
Debt Instrument [Line Items] | ||||||
Percentage added for interest rate | 1.15% | |||||
LIBOR | Revolving Credit Facility | EBO Facility | ||||||
Debt Instrument [Line Items] | ||||||
Percentage added for interest rate | 1.80% | 3.05% | ||||
LIBOR | Revolving Credit Facility | RPL Facility | ||||||
Debt Instrument [Line Items] | ||||||
Percentage added for interest rate | 2.50% |
Ordinary Shares (Detail)
Ordinary Shares (Detail) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, Par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 71,016,771 | 71,016,771 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Basic EPS: | ||||
Net (loss) income available to common shareholders | $ 1,198 | $ 16,458 | $ 50,660 | $ 115,020 |
Weighted average number of shares outstanding | 71,016,771 | 71,016,771 | 71,016,771 | 71,016,771 |
Less: Net income allocated to participating securities, basic | $ (7) | $ (21) | $ 0 | $ 0 |
Adjusted net income available to common shareholders | $ 1,191 | $ 16,437 | $ 50,660 | $ 115,020 |
Basic earnings per share (usd per share) | $ 0.02 | $ 0.23 | $ 0.71 | $ 1.62 |
Dilutive Securities: | ||||
Less: Net income allocated to participating securities | $ (7) | $ (21) | $ 0 | $ 0 |
Incremental ordinary shares deemed outstanding | 12,500 | 67,539 | 0 | 0 |
Diluted EPS: | ||||
Income allocated to common shares and assumed share conversions | $ 1,191 | $ 16,437 | $ 50,660 | $ 115,020 |
Average diluted ordinary shares | 71,029,271 | 71,084,310 | 71,016,771 | 71,016,771 |
Diluted earnings per share (usd per share) | $ 0.02 | $ 0.23 | $ 0.71 | $ 1.62 |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities (Details) - shares | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive (shares) | 37,500 | 37,500 | 640,000 | 640,000 |
Market-Based Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Market-based (shares) | 50,000 | 50,000 | 640,000 | 640,000 |
Derivative Financial Instrume69
Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | Apr. 05, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Reclassification of loss on settlement of interest rate swaps recognized in net income | $ 440 | |
Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Cash collateral with right to reclaim | $ 1,077 | |
Cash collateral obligated to return of hedge agreements | $ 1,370 |
Derivative Financial Instrume70
Derivative Financial Instruments - Interest Rate Swaps (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | |
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives, Notional Amount | $ 411,897 | ||
Total asset derivatives, Fair Value | 1,370 | ||
Total liability derivatives, Notional Amount | 99,008 | ||
Total liability derivatives, Fair Value | (211) | ||
Net settlement of interest rate swaps upon termination | 1,587 | ||
Unrealized losses related to interest rate swap included in other comprehensive income | $ 1,778 | $ 2,005 | |
Designated as Hedges | |||
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives, Notional Amount | 411,897 | ||
Total asset derivatives, Fair Value | 1,370 | ||
Total liability derivatives, Notional Amount | 99,008 | ||
Total liability derivatives, Fair Value | $ (211) | ||
Designated as Hedges | Other Assets | Interest Rate Swap 3 | |||
Derivatives, Fair Value [Line Items] | |||
Date Opened | Sep. 15, 2012 | ||
Effective Date | Sep. 15, 2012 | ||
Maturity | Aug. 15, 2017 | ||
We Pay | 0.5188% | ||
Total asset derivatives, Notional Amount | $ 73,888 | ||
Total asset derivatives, Fair Value | $ 877 | ||
Designated as Hedges | Other Assets | Interest Rate Swap 5 | |||
Derivatives, Fair Value [Line Items] | |||
Date Opened | Jan. 15, 2013 | ||
Effective Date | Jan. 15, 2016 | ||
Maturity | Dec. 15, 2017 | ||
We Pay | 1.3975% | ||
Total asset derivatives, Notional Amount | $ 338,009 | ||
Total asset derivatives, Fair Value | $ 493 | ||
Designated as Hedges | Other Liabilities | Interest Rate Swap 1 | |||
Derivatives, Fair Value [Line Items] | |||
Date Opened | Mar. 15, 2012 | ||
Effective Date | Mar. 15, 2012 | ||
Maturity | Mar. 15, 2016 | ||
We Pay | 0.6325% | ||
Total liability derivatives, Notional Amount | $ 81,506 | ||
Total liability derivatives, Fair Value | $ (209) | ||
Designated as Hedges | Other Liabilities | Interest Rate Swap 2 | |||
Derivatives, Fair Value [Line Items] | |||
Date Opened | May 15, 2012 | ||
Effective Date | May 15, 2012 | ||
Maturity | May 15, 2016 | ||
We Pay | 0.607% | ||
Total liability derivatives, Notional Amount | $ 17,502 | ||
Total liability derivatives, Fair Value | $ (2) |
Derivative Financial Instrume71
Derivative Financial Instruments - Summarization of Use of Derivative (Detail) - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 05, 2015 | Jun. 30, 2014 | |
Derivatives, Notional Disclosures [Roll Forward] | ||
Notional beginning balance | $ 510,905 | $ 953,195 |
Additions | 0 | 0 |
Maturities | 0 | 0 |
Terminations | (488,813) | 0 |
Amortization | (22,092) | (315,451) |
Notional ending balance | $ 0 | $ 637,744 |
Interest Income - Calculation o
Interest Income - Calculation of Interest Income on Notes Receivable (Detail) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Other Income and Expenses [Abstract] | ||||
Servicing fees collected | $ 12,587 | $ 192,884 | $ 185,690 | $ 374,847 |
Subservicing fee payable to Ocwen | (6,097) | (97,039) | (90,901) | (181,545) |
Net servicing fees retained by HLSS | 6,490 | 95,845 | 94,789 | 193,302 |
Reduction in Notes receivable – Rights to MSRs | (1,128) | (17,497) | (4,190) | (4,190) |
Servicing transfers | 0 | 1,899 | 0 | 0 |
Increase (decrease) in the fair value of Notes receivable – Rights to MSRs | 0 | (3,679) | (4,025) | 0 |
Total | $ 5,362 | $ 76,568 | $ 86,574 | $ 189,112 |
Interest Income - Other (Detail
Interest Income - Other (Detail) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Interest and Other Income [Line Items] | ||||
Interest income – other | $ 1 | $ 25 | $ 13 | $ 30 |
LIBOR | Minimum | ||||
Interest and Other Income [Line Items] | ||||
Basis points added to 1-Month LIBOR | 4.50% | |||
LIBOR | Maximum | ||||
Interest and Other Income [Line Items] | ||||
Basis points added to 1-Month LIBOR | 5.50% | |||
Continuing Operations | Bank Account Interest | ||||
Interest and Other Income [Line Items] | ||||
Interest income – other | 1 | $ 25 | 13 | 30 |
Discontinued Operations | ||||
Interest and Other Income [Line Items] | ||||
Interest income – other | 542 | 9,994 | 7,777 | 10,721 |
Discontinued Operations | Loan Interest | ||||
Interest and Other Income [Line Items] | ||||
Interest income – other | 435 | 7,843 | 5,770 | 7,554 |
Discontinued Operations | Advance Financing Interest | ||||
Interest and Other Income [Line Items] | ||||
Interest income – other | 67 | 1,094 | 952 | 1,154 |
Discontinued Operations | Bank Account Interest | ||||
Interest and Other Income [Line Items] | ||||
Interest income – other | $ 40 | $ 1,057 | $ 1,055 | $ 2,013 |
Interest Expense (Detail)
Interest Expense (Detail) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Interest Expense [Abstract] | ||||
Match funded liabilities | $ 2,266 | $ 29,547 | $ 27,126 | $ 53,956 |
Other borrowings | 543 | 9,530 | 7,961 | 13,284 |
Amortization of debt issuance costs | 209 | 4,587 | 4,598 | 9,560 |
Interest rate swaps | 0 | 167 | 316 | 712 |
Interest expense | $ 3,018 | $ 43,831 | $ 40,001 | $ 77,512 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Apr. 05, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate shares authorized under the Plan | 2,000,000 | ||
Reduction to Retained earnings for share-based compensation | $ 171 | $ (64) | |
Share-based compensation net of forfeitures | $ (145) | $ 64 | |
Forfeiture rate | 4.00% | ||
Vested shares | 0 | ||
Service-Based Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual life (in years) | 10 years | 10 years | |
Market-Based Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual life (in years) | 10 years | ||
Required percentage of strike price to vest | 125.00% | ||
Annualized rate of return for vesting criteria | 12.50% | ||
Market-Based Options | Immediately On The First Date As Of Which Both Of The Market-Based Criteria Have Been Met | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% | ||
Market-Based Options | First Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% | ||
Market-Based Options | Second Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% | ||
Market-Based Options | Third Anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% | ||
Retained Earnings | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Reduction to Retained earnings for share-based compensation | $ 26 | $ 0 |
Share-based Compensation - Fair
Share-based Compensation - Fair Value Assumptions (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Market-Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.13% | |
Risk-free interest rate, maximum | 3.23% | |
Expected stock price volatility | 19.62% | |
Expected dividend yield | 7.82% | |
Contractual life (in years) | 10 years | |
Market-Based Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option life (in years) | 2 years 8 months | |
Fair Value (usd per share) | $ 0.53 | |
Market-Based Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option life (in years) | 3 years 6 months | |
Fair Value (usd per share) | $ 1.43 | |
Service-Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.13% | |
Expected stock price volatility | 19.62% | |
Expected dividend yield | 7.82% | |
Expected option life (in years) | 6 years 6 months | |
Contractual life (in years) | 10 years | 10 years |
Service-Based Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair Value (usd per share) | $ 0.87 | |
Service-Based Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair Value (usd per share) | $ 1.27 |
Share-based Compensation - Opti
Share-based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Apr. 05, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at December 31, 2014 | 1,280,000 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited or expired | (1,280,000) | |
Outstanding at April 5, 2015 | 0 | 1,280,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding at December 31, 2014, weighted average exercise price per share (usd per share) | $ 22.51 | |
Granted, weighted average exercise price per share (usd per share) | 0 | |
Exercised, weighted average exercise price per share (usd per share) | 0 | |
Forfeited or expired, weighted average exercise price per share (usd per share) | 22.51 | |
Outstanding at April 5, 2015, weighted average exercise price per share (usd per share) | $ 0 | $ 22.51 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term | 9 years 1 month | |
Outstanding, aggregate intrinsic value | $ 0 | $ 0 |
Exercisable at April 5, 2015 | 0 | |
Exercisable at April 5, 2015, weighted average exercise price per share | $ 0 | |
Exercisable, weighted average remaining contractual term | ||
Exercisable, aggregate intrinsic value | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 0.00% | 0.00% | 0.00% | 0.00% | 0.10% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - Affiliated Entity - USD ($) | Apr. 05, 2015 | May. 03, 2014 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
New Residential Investment Corp. | Accounts Receivable, Related Party | |||||||
Related Party Transaction [Line Items] | |||||||
Receivables from NRZ | $ 2,170 | ||||||
Ocwen | |||||||
Related Party Transaction [Line Items] | |||||||
Receivables from NRZ | $ 94,401,000 | ||||||
Servicing advances purchase price | $ 20,157,000 | ||||||
Ocwen | Loan Interest | |||||||
Related Party Transaction [Line Items] | |||||||
Interest income | $ 67,000 | $ 1,094,000 | $ 952,000 | $ 1,154,000 | |||
Ocwen | LIBOR | Interest Income | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate, description | 1-month LIBOR | ||||||
Ocwen | Minimum | LIBOR | Interest Income | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage added for interest rate | 0.45% | ||||||
Ocwen | Maximum | LIBOR | Interest Income | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage added for interest rate | 0.55% | ||||||
Professional Services Agreement, Services Received | Ocwen | |||||||
Related Party Transaction [Line Items] | |||||||
Additional markup on actual cost incurred | 15.00% | ||||||
Professional services fee earned | 4,000 | 54,000 | 773,000 | 1,401,000 | |||
Professional services fee incurred | 0 | 0 | 225,000 | 379,000 | |||
Administrative Services Agreement, Services Received | Altisource | |||||||
Related Party Transaction [Line Items] | |||||||
Additional markup on actual cost incurred | 15.00% | ||||||
Professional services fee incurred | $ 76,000 | $ 76,000 | $ 271,000 | $ 489,000 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with Ocwen under Purchase Agreement (Detail) - USD ($) $ in Thousands | Apr. 05, 2015 | Apr. 05, 2015 | Jun. 30, 2014 | Jun. 30, 2014 |
Related Party Transactions [Abstract] | ||||
Servicing fees collected | $ 12,587 | $ 192,884 | $ 185,690 | $ 374,847 |
Subservicing fee payable to Ocwen | (6,097) | (97,039) | (90,901) | (181,545) |
Net servicing fees retained by HLSS | 6,490 | 95,845 | 94,789 | 193,302 |
Servicing advances purchased from Ocwen in the ordinary course of business | $ 55,378 | $ 3,556,561 | $ 3,368,379 | $ 6,871,754 |
Related Party Transactions - Re
Related Party Transactions - Receivable from and Payable to Related Parties (Detail) - Dec. 31, 2014 - USD ($) $ in Thousands | Total |
Related Party Transaction [Line Items] | |
Period for related party to remit collections | 2 days |
Ocwen | Affiliated Entity | |
Related Party Transaction [Line Items] | |
Servicing advance financing receivables | $ 84,107 |
Servicing fees collected | 5,686 |
Professional services | 33 |
Loan collections in transit | 3,885 |
Other | 690 |
Receivables from Ocwen | 94,401 |
Subservicing fees payable | 7,999 |
Advance purchases | 5,285 |
Other | 1,133 |
Payables to related party | $ 14,417 |
Period to forward servicing fees collected on the Company's behalf by Ocwen | 3 days |
Altisource | Affiliated Entity | |
Related Party Transaction [Line Items] | |
Payables to related party | $ 86 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - Pending Litigation - lawsuit | 1 Months Ended | 3 Months Ended |
Feb. 13, 2015 | Mar. 20, 2015 | |
New York Actions | ||
Loss Contingencies [Line Items] | ||
Number of lawsuits and actions filed | 3 | |
Ocwen | Ocwen Derivative Actions | ||
Loss Contingencies [Line Items] | ||
Number of lawsuits and actions filed | 2 |
Uncategorized Items - hlss-2015
Label | Element | Value |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ 1,198 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ 50,660 |